DETERMINATION OF NATIONAL INCOME

Question 1

TOTAL NATIONAL ECONOMIC AGGREGATES

Answer 1

1. GDP MP
2. GNP MP
3. NNP MP
4. GDP FC
5. NDP FC
6. NNP FC

Question 2

MEANING GDP MP

FORMULA WITH RESPECT TO NDP MP

Answer 2

IT IS THE FINAL MARKET VALUE OF GOODS AND SERVICES PRODUCED WITHIN DOMESTIC TERRITORY OF THE COUNTRY DURING GIVEN PERIOD OF TIME.

NDP MP = GDP MP - DEPRECIATION

Question 3

MEANING GNP MP

FORMULA

Answer 3

GNP MP IS DEFINED AS MARKET VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED BY NORMAL RESIDENTS OF A COUNTRY DURING A YEAR, INCLUSIVE OF DEPRECIATION.

GNP MP = GDP MP + NET FACTOR INCOME FROM ABROAD

Question 4

NFIA

Answer 4

Net Factor Income from abroad = net consumption of employees + Net income from Property and entrepreneurship + net retained earnings

Question 5

NNP MP

Answer 5

Market value of all final goods and services produced by normal residents of the countries during the year after making allowance for depreciation.

NNP MP = GNP MP - DEP

Question 6

MEANING GDP FC

FORMULA

Answer 6

IT IS SUM TOTAL OF EARNINGS RECEIVED BY VARIOUS FACTORS OF PRODUCTION IN THE FORM OF WAGES, INTEREST, RENT, PROFITS ETC.

GDP FC = GDP MP - INDIRECT TAX + SUBSIDIES

COMPENSATION OF EMPLOYEES + OPERATING SURPLUS + MIXED INCOME OF SELF EMPLOYED + DEPRECIATION

Question 7

NDP FC

Answer 7

TOTAL FACTOR INCOME EARNED BY FACTOR OF PRODUCTION

NDP FC = NDP MP - NET INDIRECT TAX

Question 8

NNP FC

Answer 8

FACTOR INCOME ACCRUING TO THE NORMAL RESIDENTS OF THE COUNTRY DURING A YEAR.

SUM TOTAL OF DOMESTIC FACTOR INCOME + INCOME FROM ABROAD

Question 9

Personal Income

Answer 9

National Income + Income received but not earned - Income earned but not received

NI - undistributed profit - Net Interest payments made by households - corporate tax + Transfer payments to the households from firms and government

Question 10

Private Income

Answer 10

Factor Income from net domestic product accruing to the Private sector + Net factor Income from abroad + national Debt Interest + Current Transfers from government + Other Net transfers from the rest of the world

Question 10

Disposable income

Answer 10

PI - Personal Income tax - non tax payments

Question 11

NDP FC FF

Answer 11

Compensation of employees + Operating surplus + Mixed Income of Self Employed

Question 12

GDP FC FF

Answer 12

Compensation of employees + operating Surplus + Mixed income of Self employed + Depreciation

Question 13

GDP MP FF

Answer 13

Compensation of employees + Mixed Income of Self Employed + Operating surplus + Depreciation + Net Direct Taxes

Question 14

National Income

Answer 14

NDP MP - Indirect taxes + Subsidies