Identify the correct sequence for computing National Income:
- Add NFIA to calculate NNPFC.
- Add sales and change in stock to get value of output (VO).
- Value of intermediate consumption to be deducted from value of output to calculate GVA at MP
- Deduct value of depreciation and Net Indirect Tax to get at NVAFC
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct sequence for computing National Income is as follows:
- Add sales and change in stock to get value of output (VO).
- Value of intermediate consumption to be deducted from value of output to calculate GVA at MP
- Deduct value of depreciation and Net Indirect Tax to get at NVAFC
- Add NFIA to calculate NNPFC.
GVOMP = Sales + Change in stocks
GVAMP/GDPMP = GVOMP - intermediate consumption
NVAFC/NDPFC= GVAMP - Depreciation - Net indirect tax
NNPFC = NDPFC + NFIA