Question

when is gdp of an economy equal to its gnp?

Define gross national disposable income.

When will Domestic factor income be less than national income and when it will be greater than national income?

Answer 1

Sol. 1

We know,Gross National Income = Gross Domestic  Income + Net Factor Income From Abroad.

where,

Net Factor Income From Abroad = Factor Income Earned From Abroad - Factor Income Paid Abroad.

Thus,

Gross National Income (GNP) will be equal to Gross Domestic Product (GDP) when Net Factor Income From Abroad is zero.

Sol. 2

Gross National Disposable Income is that part of Gross National Income that is available to all the normal residents of the country for consumptions and savings.

Gross National Disposable Income = National Income + Net Indirect Taxes + Net Transfer Payments From Rest Of The World + Depreciation.

Sol. 3

Domestic Factor Income will be less than National Income when Factor Income Earned From Abroad is ore than Factor Income Paid to Abroad.

Answer 2

Answer:

GDP and GNP both will be equal, when the *net Factor Income from the abroad' is zero*....