Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Find GDPFC from the following data:

GNPMP 700
Consumption of fixed capital 40
Factor income from abroad 300
Net indirect taxes 50
Factor income paid abroad 100
Options:

400

560

350

450

Correct Answer:

450

Explanation:

The correct answer is option 4: 450

GNPMP=GDPMP+ NFIA

GDPMP =  GNPMP - NFIA

            = 700 - (300-100)

            = 500

GDPFC =  GDPMP - NIT

            = 500-50

            = 450

Alternatively,

GDPFC = GDPMP - NIT

GDPFC =(GNPMP - NFIA) - NIT

GDPFC = 700 - (300 - 100) - 50

GDPFC = 700 - 200 - 50

GDPFC = 450

NFIA = Factor income from abroad - Factor income paid abroad