Advertisements
Advertisements
Question
How is national income different from GNP at market prices?
Distinguish Between
Advertisements
Solution
| Sr. No. | Basis | National Income (NNP at Factor Cost) | GNP at Market Prices (GNP MP) |
| 1. | Full form | Net National Product at Factor Cost (NNP at FC) | Gross National Product at Market Prices (GNP MP) |
| 2. | Meaning | Total income earned by the normal residents of a country from production, excluding depreciation and net indirect taxes. | Total value of goods and services produced by the residents of a country, including depreciation and indirect taxes. |
| 3. | Depreciation | Excluded (Net measure) | Included (Gross measure) |
| 4. | Tax treatment | Excludes indirect taxes and includes subsidies (measured at factor cost) | Includes indirect taxes and excludes subsidies (measured at market prices) |
| 5. | Reflects | Actual earnings of the country’s residents from productive activities. | Total value of production by residents at current market prices. |
| 6. | Formula | National Income = GNP at FC − Depreciation = NNP at FC | GNP MP = GDP MP + Net Factor Income from Abroad |
shaalaa.com
Is there an error in this question or solution?
