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Calculate Net Domestic Product at Factor Cost and Private Income - Economics

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Calculate Net Domestic Product at Factor Cost and Private Income:

    Rs crore
1 Gross National Disposable Income 600
2 Net current transfers to abroad (-)20
3 Consumption of fixed capital 60
4 Current transfers from government 30
5 Indirect tax 100
6 Income accruing to government 80
7 Subsidies 10
8 Net factor income to abroad (-)10
9 National debt interest 40
10 Personal tax 150
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Solution

Gross National Disposable Income = Net National Disposable Income + Consumption of fixed capital

                                            600 = Net National Disposable Income + 60

    Net National Disposable Income = Rs 540 crore

Net National Disposable Income = Net Domestic Product at Factor Cost + (Indirect tax- Subsidies) + Net factor income from abroad + Net current transfers from abroad

                                         540 = Net Domestic Product at Factor Cost + (100-10)-(-10)-(-20)

                                         540 = Net Domestic Product at Factor Cost + 120

Net Domestic Product at Factor Cost = Rs 420 crore

Private Income = Net Domestic Product at Factor Cost- Income accruing to government + Net factor income from abroad + Current transfers from government+ Net current transfers from abroad+ National debt interest

Private Income = 420-80-(-10)+30-(-20)+40

Private Income = Rs 440 crore

Concept: Gross and Net Domestic Product (GDP and NDP)
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