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Questions
Distinguish between:
National income at market prices and national income at factor cost.
Distinguish between national product (income) at market prices and national product (income) at factor cost.
Distinguish Between
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Solution
| Sr. No. | Basis | National income at market price (NNPMP) | National income at factor cost (NNPFC) |
| 1. | Definition | It refers to the total market value of all the final goods and services produced by the normal residents of a country both within the domestic territory and outside the country. | It refers to the aggregate of all factor incomes earned by those factors of production that are normal residents of a country, both within the domestic territory and abroad. |
| 2. | Indirect taxes and subsidies | It takes into account the impact of indirect taxes and subsidies. | It does not take into consideration the impact of subsidies and indirect taxes. |
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