For an economy (in Rs crore): GDP at market prices = 2,000; net factor income from abroad = 50; depreciation = 150; net indirect taxes = 100. Consider the following statements:
(A) GNP at market prices is Rs 2,050 crore.
(B) NNP at market prices is Rs 1,850 crore.
(C) National Income is Rs 1,800 crore.
(D) NDP at factor cost is Rs 1,800 crore.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) and (C) only
Work each aggregate from GDP at market prices: add NFIA for “national”, deduct depreciation for “net”, and deduct net indirect taxes for “factor cost”.
(A) GNP at market prices is Rs 2,050 crore. — Correct. GNP = GDP + NFIA = 2,000 + 50 = 2,050.
(B) NNP at market prices is Rs 1,850 crore. — Incorrect. NNP at market prices = GNP − depreciation = 2,050 − 150 = 1,900. 1,850 is NDP at market prices.
(C) National Income is Rs 1,800 crore. — Correct. NI = NNP at market prices − net indirect taxes = 1,900 − 100 = 1,800.
(D) NDP at factor cost is Rs 1,800 crore. — Incorrect. NDP at factor cost = 2,000 − 150 − 100 = 1,750. It leaves out NFIA, so it is below NI.
NCERT (2026-27): “2.3 SOME MACROECONOMIC IDENTITIES … Hence, GNP ≡ GDP + Net factor income from abroad” Glossary: “Net National Product (NNP) (at market price) – GNP – depreciation.” Glossary: “NNP (at factor cost) or National Income (NI) – NNP at market price – (Indirect taxes – Subsidies).” Glossary: “Net Domestic Product (NDP) – Aggregate value of goods and services produced within the domestic territory of a country which does not include the depreciation of capital stock.” |