Question

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

		(Rs Arab)
1	Net current transfers to abroad	5
2	Government final consumption expenditure	100
3	Net indirect tax	80
4	Private final consumption expenditure	300
5	Consumption of fixed capital	20
6	Gross domestic fixed capital formation	50
7	Net imports	(-)10
8	Closing stock	25
9	Opening stock	25
10	Net factor income to abroad	10

Answer 1

National domestic income at factor cost = Private final consumption expenditure + Government final consumption expenditure − Net imports + (Gross domestic fixed capital formation + Closing stock − Opening stock) − Depreciation − Net indirect taxes

National income (NDP_FC) = = 300 + 100 − (−10) + (50 +25 − 25) − 20 − 80 = Rs 360 arab

Net national disposable income = = NDP_FC − Net factor income to abroad + Net indirect taxes + Net current transfers from ROW

Net national disposable income = 360 − 10 + 80 + (−5) = Rs 425 arab