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
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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