Question

Which formula gives National Income at Factor Cost?

Options

• \[NNP_{FC}=GDP_{MP}+\text{Net Indirect Taxes}-\text{Depreciation}-NFIA\]

• \[NNP_{FC}=GDP_{MP}+\text{Depreciation}+\text{Net Indirect Taxes}-NFIA\]

• \[NNP_{FC}=GDP_{MP}-NFIA+\text{Depreciation}\]

• \[NNP_{FC}=GDP_{MP}-\text{Depreciation}-\text{Net Indirect Taxes}+NFIA\]

Answer 1

National Income at Factor Cost is obtained from \(GDP_{MP}\) by deducting Depreciation and Net Indirect Taxes, then adding NFIA. This conversion accounts for capital consumption, taxes, subsidies, and foreign factor income.