Question

Calculate NNP at fc
1-net current transfer from rest of the world=80
2-wages and salaries=600
3-net indirect tax=75
4-net factor income from abroad=—20
5-rent and intrest=160
6-corporate tax=40
7-mixed income=280
8-retained earning=60
9-dividend=20
10-consumption of fixed capital =120

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Answer 1

Answer:

NNPfc = 1140 crores

Explanation:

NDPfc= COE + Operating surplus + Mixed Income

= 600+(160+20+40+60) +280

= 1160 crores

NNPfc= NNPfc + NFIA

= 1160 + (-2)

= 1140 crores.

Answer 2

Answer:

NNP at fc = Rs. 1,140

Explanation:

The national income is the net national product at factor cost which is abbreviated as NNPfc.

Calculation of National Income by Income method:

Firstly calculate the net domestic product at factor cost (NDPfc) by adding compensation to employees, rent and loyalty, interest, mixed income and profit.

The NDPfc is:

NDPfc = Wages and salaries + rent and interest + mixed income + corporate tax + retained earning + dividend

$NDP fc = 600 + 160 + 280 + 40 + 60 + 20 \\\\NDP fc = Rs. 1,160$

To estimate the national income or the net national product at factor cost, deduct the net factor income from abroad from the net domestic product at factor cost (NDPfc)

NNP at fc = NDPfc + Net factor income from abroad

$NNP fc = 1,160 + (-) 20\\NNP fc = Rs. 1,140$

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