CBSE class 12 macroeconomics Notes Chapter 3 National Income And Related Aggregates

Chapter 3 National Income And Related Aggregates


Basic Aggregates Of National Income

*Conversions:
(1) If Gross ⇨⇨⇨⇨ Net
 Gross - Depreciation = Net
Net + Depreciation = Gross
*Alternate names of Depreciation = Consumption of Fixed Capital,  Replacement Cost, Capital Consumption Allowance.

(2) IF Domestic Income ⇨⇨⇨⇨  National Income
Domestic Income + NFIA  = National Income
National Income - NFIA  = Domestic
(NFIA = Factor income from abroad - Factor Income To abroad)
(NFIA = Factor Income earned from abroad - Factor income Paid abroad)
[If in question Only "Factor Income To Abroad  = 10" given then NFIA = -10]
[If in question Only "Factor Income To Abroad = -10" given then NFIA = 10]

(3) If Factor Cost ⇨⇨⇨⇨ Market Price
Factor Cost + NIT = Market Price
Market Price - NIT = Factor Cost
(NIT = Indirect Tax - Subsidies)


Gross Domestic Product at Market price (GDPmp)
Meaning: refers to gross market value of all final goods and services produced within the domestic territory of a country during a period of one year.

Gross Domestic Product at Factor Cost (GDPfc)
Meaning: Refers to gross money value of all the final goods and services produced within the domestic territory of a country during a period of one year.

Net Domestic Product at market Price (NDPmp)
Meaning: It refers to net market value of all the final goods and services produced within the domestic territory of a country during a period of one year.

Net Domestic Product at Factor Cost (NDPfc)
Meaning: refers to net money value of all the final goods and service produced within the domestic territory of a country during a period of one year.

Gross National Product at market Price(GNPmp)
Meaning: refers to gross market value of all the final goods and services produced by the normal residents of a country during a period of one year.

Gross National Product at Factor Cost (GNPfc)
Meaning: refers to gross money value of  all the final goods and services produced by the normal residents of a  country during a period of one year.

Net National Product at Market Cost (NNPmp)
Meaning: refers to net market value of all the final goods and services produced by normal residents of a county during a period of one year.

NET national Product at Factor cost (NNPfc)
Meaning: refers to net money value of all the final goods and services produced by normal residents of a country during a period of one year.

Practice Questions
Q1. Convert GDPmp into GDPfc
Ans: GDPmp -NIT = GDPfc

Q2. Convert GDPmp into NDPfc
Ans: GDPmp - NIT - DEP = NDPfc

Q3. Convert GDPmp into NNPfc
Ans: GDPmp - NIT - DEP + NFIA = NNPfc

Difference between Domestic Income and National Income



Difference between Gross Domestic Product at Market price And National Income 


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