Question

From the following data, calculate (a) Gross Domestic Product at Factor Cost and
(b) Factor Income to Abroad:
Items (in crore)
(1) Gross domestic capital formation............................... 600
(ii) Interest..............................200
(iii) Gross national product at market price.......................2,800
(iv) Rent.................................300
(v) Compensation of employees............................1,600
(vi) Profits............................. 400
(vii) Dividends.........................150
(vii) Factor income from abroad.................50
(ix) Change in stock.........100
(x) Net indirect taxes.......240
(xi) Net fixed capital formation..........400
(xii) Net exports.........(-) 30​

Answer 1

a) $GDP_{FC}$ = 2600 (in crores)        

b) Factor Income to Abroad = -10 (in crores)

Explanation:

$NDP_{FC}$ = Compensation of Employees + Rent + Interest + Profits

                 = 1600 + 300 + 200 + 400

                 = 2500 (in crores)

a) $GDP_{FC}$ = $NDP_{FC}$ + Gross domestic capital formation -  

                                Net fixed capital formation - Change in Stock

                = 2500 + 600 - 400 - 100

                = 2600 ( in crores)

b) Factor Income to Abroad = Factor income from abroad - {$GNP_{MP}$

                                                    - ($GDP_{FC}$ + Net indirect taxes)}

                                              = 50 - {2800 - (2500 + 240)}

                                              = -10 (in crores)