Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

From the following data calculate net domestic product at factor cost.

S.No Item ₹ crore
(I) Depreciation 20
(II) Gross National Product at Factor Cost 1000
(III) Net factor income from abroad 30
(IV) Net indirect taxes 10

 

Options:

₹ 1050 crores

₹ 900 crores

₹ 1020 crores

₹ 950 crores

Correct Answer:

₹ 950 crores

Explanation:

 The correct answer is option (4) : ₹ 950 crores

To calculate Net Domestic Product at Factor Cost (NDP at FC), we use the following formula :

NDP at FC = Gross National Product at Factor Cost (GNP at DC) - Depreciation - NFIA

Given the provided data :

(i) GNP at FC = ₹1000 crores

(ii) Depreciation = ₹20 crores

(iv) NFIA = ₹30 crores

GDP (FC)= GNP (FC)- NFIA

             = 1000-30

            = 970

NDP (FC)= GDP (FC) - Depreciation

             = 970-20

             = ₹950 crores