Question

Calculate ‘net national product’ at factor cost and 'private income' from the following:

		(Rs Arab)
1	National debt interest	60
2	Wages and salaries	600
3	Net current transfers to abroad	20
4	Rent	200
5	Transfer payments by the government	70
6	Interest	300
7	A net domestic product at factor cost accruing to government	140
8	Social security contributions by employers	100
9	Net factor income paid to abroad	50
10	Profits	300

 

Answer 1

NNP_FC = Wages and salaries + Employers contribution to social security + Rent + Interest + Profit - Net factor income to abroad

= 600 + 100 + 200 + 300 + 300 − 50 = Rs 1,450 arab

Private Income = = NNP_FC − (−Net factor income to abroad) − Income from NDP accruing to govt. − Net factor income to abroad + Net current transfers from govt. − Net transfers to abroad + Interest on national debt

= 1450 + 50 − 400 − 50 + 70 − 20 + 60 = Rs 1,160 arab