Which of the following equation is true?
- NNPMP = GDPMP - Depreciation + NFIA
- GDPFC = NDPFC / NVAFC - Depreciation
- GNPFC = NDPFC - NFIA + Depreciation
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: Only 1
The corrected equations are as follows:
- NNPMP = GDPMP - Depreciation + NFIA
- GDPFC = NDPFC / NVAFC + Depreciation
- GNPFC = NDPFC + NFIA + Depreciation
In order to convert net into gross we add depreciation whereas, to convert domestic product to national product we need to add net factor income from abroad.