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Calculate National Income and Gross National Disposable Income from the Following - Economics

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Calculate national income and gross national disposable income from the following:

                                                                                                   (Rs Arab)

i. Net current transfers to abroad                                                       (-) 15
ii. Private final consumption expenditure                                               600
iii. Subsidies                                                                                        20
iv. Government final consumption expenditure                                       100
v. Indirect tax                                                                                     120
vi. Net imports                                                                                     20
vii. Consumption of fixed capital                                                            35
viii. Net change in stocks                                                                    (-)10
ix. Net factor income to abroad                                                              5
x. Net domestic capital formation                                                          110

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Solution

National Income = Private Final Consumption Expenditure + Government Final Consumption Expenditure − Net Imports + (Net Domestic Capital Formation + Depreciation) − Depreciation − (Indirect Taxes − Subsidies) − Factor Income to Abroad

National Income (NNPFc) = 600 + 100 + (−20) + (110 + 35) − 35 − (120 − 20) − 5 = Rs 685 arab

Gross National Disposable Income = NNPFc + Depreciation + Indirect Taxes − Subsidies + Net Current Transfers from ROW

= 685 + 35 + 120 − 20 − (−15) = Rs 835 arab

Concept: National Disposable Income (Gross and Net)
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