Question

Calculate Net Domestic Product at Factor cost and Net National Disposable Income from the following:

	(Rs. in Arab)
(i) Net current transfers to abroad	5
(ii) Government final consumption expenditure	100
(iii) Net indirect tax	80
(iv) Private final consumption expenditure	300
(v) Consumption of fixed capital	20
(vi) Gross domestic fixed capital formation	50
(vii) Net imports	(-) 10
(viii) Closing stock	25
(ix) Opening stock	25
(x) Net factor income to abroad	10

 

Answer 1

(i) Net Domestic Product at Factor Cost (NDP_FC)

=Privat final consumption expenditure + Govemment final consumption expenditure + Gross domestic fixed capital formation + charge stock (closing stock-opening stock)-Net Import - Net Indirect tax - Consumption of fixed capital

=300 + 100 + 50 + (25 - 25) - (- 10) - 80 - 20

=460-100

=Rs. 360 Arab

(ii) Net National Disposalle Income (NNDI)

=(NDP_FC + Net Indirect tax - Net Factor Incorne to Abroad - Net current transfers to Abroad

=360+80-10-5

=Rs. 425 Arab