You are free to use this image on your website, templates, etc., Please provide us with an attribution link, Net Domestic Product at factor cost (NDP-FC), Gross Domestic Product vs Net Domestic Product. (ii) National debt interest. Net Value Added at Factor Cost (NVAFC) = Value of Output (Sales + Change in Stock) Intermediate Cost- Depreciation Net Indirect Tax (b) Private Income = NDPFC Domestic Product Accruing to Government Net Value Added at Factor Cost (NVAFC) = Sales + Change in Stock (Closing Stock- Opening Stock)- Purchase of Intermediate Goods Consumption of Fixed Capital Indirect Tax = 750-450 = Rs. (iii) Expenditure on transfer payments by the government is not to be included. Calculate National Income and Gross National Disposable Income from the following (Delhi 2011), Ans. (b) Gross National Disposable Income (GNDI) Suppose the agriculture sector experiences a decline in the value of physical capital of $2,000, and the manufacturing sector experiences a decline of $5,000. (All India 2010) = 1200 + 600+ 340 + (-40)-60-30 The $80 million is the amount available for consumption or investment in the economy after accounting for the depreciation of physical capital. Teachoo answers all your questions if you are a Black user! From the following data calculate Net Value Added at Factor Cost (Delhi 2011 c), Ans. Since net value added by an enterprise is the result of services of factors of production, therefore, the same is distributed in the form of money income (rent, wages, interest, etc.) (v) Commission earned on account of sale and purchase of second hand goods is included. Difference Between Monetary Policy and Fiscal Policy, Your Mobile number and Email id will not be published. (i) Salaries paid to Russians working in Indian Embassy in Russia will not be included in estimation of National Income of India, as it is a factor income paid to abroad. (ii) Payment of salaries to its staff by an embassy located in New Delhi will not be included in domestic income of India, as it is not a part of domestic territory of India. 310 crore, Gross Value Added (GVA) by B = Sales by B + Net Change in Stock of B What Is GDP and Why Is It So Important to Economists and Investors? = 530-310 (i) Interest paid by banks on deposits by individuals should be included in estimation of National Income as it will be treated as factor income. = 1550 190 = Rs. The formula for NDP can be expressed as follows: Depreciation = Depreciation of capital assets such as equipment, vehicles, housing, and more. Income Method: NI = Rent + Compensation + Interest + Profit + Mixed Income.2. Income to Abroad + Consumption of Fixed Capital Calculate Net Value Added at Factor Cost from the following data, Ans. 660 crore, 54. How will you treat the following while estimating National Income? (All India 2009). (ii) Interest paid by an individual on a car loan taken from a bank. The consent submitted will only be used for data processing originating from this website. NDP = Net domestic product GDP = Gross domestic product Depreciation = Depreciation of capital assets such as equipment, vehicles, housing, and more As the NDP takes into account the depreciation of capital assets, it is considered to be superior to the GDP as a measure of well-being of a nation. Only factor incomes which are earned by rendering productive services are included. But wealth tax and gift tax are excluded since they are deemed to be paid from past savings and wealth. = 300+200 + 700-120-150 + 20 , , (b) Net National Disposable Income from the following data (Delhi 2008), 82. = 4100- (600 + 700 + 700) 50 -100 (a) Net National Product at Market Price 78. (i) Profits earned by a branch of foreign bank in India will be included in domestic income of India, as the profits are earned in domestic territory of India. = [800 + (40 50)] 500 [200 -180] + 60 10. The construction of new homes on previously unused real estate can also represent a gain for the NDP if the residences are not intended to replace defunct or demolished property. It is represented by: GNPMP = NNPFC + Net Indirect Taxes + Depreciation. Solved Example for You Depreciation. (i) Social security contributions by employees. This provides a more comprehensive picture of a countrys economic output, as it considers both the production of goods and services and the market prices at which they are sold, including the effect of government interventions. (i) Income from illegal activities like smuggling, theft, gambling, etc, should not be included. It is net money value of Goods and Services Produced in domestic territory after Depreciation It is also called Net Domestic Product at Factor Price (NDP FC ) Formula NDP FC = GDP FC - Depreciation Example Suppose total value of goods and services produced in DOMESTIC TERRITORY is 100 Depreciation on Maintaining Fixed assets is 20 Uploaded by . It helps to solve the central problem of 'full employment of resources' in an economy.Be it noted that macroeconomic theory is also called 'Theory of Income and Employment' because it tries to explain how level of income and employment is determined in an economy and how unemployment can be removed. 290 crore (a) Net National Product at Market Price and Calculate And by adding the NVA FC of all industries, we get the net domestic product at factor cost, which is represented as NDP FC. (ii) Payment of interest on loan taken by an employee from the employer. As the NDP takes into account the depreciation of capital assets, it is considered to be superior to the GDP as a measure of well-being of a nation. The NDP also takes into account the other factors such as obsolescence and complete destruction of the asset. (a)Income method and (i) Interest paid by banks on deposits. + (Excise Duty Subsidy) + Intermediate Consumption It is evaluated based on income, the addition of value, or expenditure. Gross National Product at Factor Cost (GNPFC) = Compensation of Employees + (Rent + Interest+ Profits) + Net Factor Income from Abroad + Consumption of Fixed Capital 2800 crore, 65. Calculate 'Gross Domestic Product of Factor Cost' from the following data: We are given Net Domestics Capital Formation (and not gross), Step 1 Calculate Gross Domestic Capital Formation, =Net Domestic Capital formation +Depreciation, =Net Domestic Capital formation +Consumption of Fixed Capital, In this question, we have to calculate GNP FC, We are given Net Domrstic Fixed Capital Formaton, First we calculate Gross Domestic Fixed Capital formation, Step 1 Calculate Gross Domestic Fixed Capital Formation, =Net Fixed Capital formation +Depreciation, =Net Fixed Capital formation +Consumption of Fixed Capital, Step 2 Calculate Gross Domestic Capital Formation, =Expenditure on Fixed Assets +Expenditure on Stock, =Gross Fixed Capital formation + Inventory Investment, =Gross Fixed Capital formation +(Closing Stock-Opening Stock), In this question, we need to calculate NDP at FC, In this question, we need to calculate GNP MP, Personal final consumption Expenditure and Persona Consumption expenditure are Sam things, Govt Final Consumption Expenditure and Govt Consumption expenditure are different things, But we need to calculate Gross domestic Capital formation and Nest Exports, =Exports of goods and servives -Imports of goods and services, Step 2 We calculate Gross Domestic Capital Formation, Get live Maths 1-on-1 Classs - Class 6 to 12, CA Maninder Singh is a Chartered Accountant for the past 13 years and a teacher from the past 17 years. (iii) Investment expenditure or gross domestic capital formation. Find Net Value Added at Market Price (All India 2012), 8. Net Domestic Product measures a countrys economic output that considers the depreciation of physical capital. = 680 + 20+100- (-5) = Rs. This is the market value of output, while income payments made to factors of production amount to Rs. (b) Private Income from the following data (All India 2011), 52. It is included in National Income. Value Added or Product Method: NI = GDP Depreciation Indirect Taxes + Overseas Net Factor Income., Following are the four components of NI accounts:1. Gross National Product at Factor Cost (GNPFC) = Compensation of Employees + Profits + Rent+ Interest + Consumption of Fixed Capital + Net Factor Income from Abroad = 500 +200+120 + (-20) + 20-30 -100 -(-10) -20 When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. Calculate sales from the following data (All India 2013), 2. Net Domestic Product at Factor Cost or NDP FC : It refers to the net money value of all the final goods and services that are produced within the domestic territory of a nation excluding the net indirect taxes and depreciation. NDP = GDP - Depreciation N DP = GDP. = 3500 + 50 2000 500 350 Calculate Net National Product at Market Price and Gross National Disposable Income from the following: ( All India 2014). Ask questions, doubts, problems and we will help you. Required fields are marked *, The net domestic product (NDP) is calculated by subtracting the value of depreciation of capital assets of the nation such as machinery, housing, and vehicles from the. 330 lakh, 21. This is important as failure to take action would result in a decrease in the country's GDP. 950 crore, (b) By Production Method Calculate Gross National Product at Market Price and Net National DisposableIncome from the following: (Foreign 2014), 44. (iii) Expenditure on machines for installation in a factory will be included while estimating NationalIncome, as it is a final consumption expenditure by factory management. Sale and purchase of second-hand goods are excluded since they are not part of production of current year but commission paid on sale of second-hand goods is included as it is reward for rendering productive services. (a) Expenditure method and This method is also known as 'Income Disposal Method'. Study of problem of unemployment in India or general price level is a macroeconomic study because they relate to Indian economy as a whole.Let it be known that an English economist J.M. The depreciation accounted for is often referred to as capital consumption allowance and represents the amount needed to replace those depreciated assets. Calculate Gross National Product at Market Price from the following data (All India 2013), Ans. This has been a guide to Net Domestic Product & its meaning. (All India 2012) (b) Factor Income toAbroad from the following data (All India 2011), 63. NFIA is added to domestic income (NDP FC) to get the National Income (NNP FC ). Find Net Value Added at Market Price (Delhi 2012), 7. = 140-110 + 5 So we use following Steps Step 1 Calculate Gross Domestic Fixed Capital Formation =Gross Fixed Capital formation =Net Fixed Capital formation +Depreciation =Net Fixed Capital formation +Consumption of Fixed Capital =350+50 =400 Step 2 Calculate Gross Domestic Capital Formation Gross Domestic Capital Formation As a result, this countrys, Net Domestic Product (NDP) would be $13,000 ($20,000 $2,000 $5,000). You must give reason for your answer. In other words, GDP measures the total value of all goods and services produced within a country. among factors of production. 310 crore, (b) Gross National Disposable Income (GNDI) =NDPFC+ Net Indirect Tax + Net Factor Income fromAbroad + Depreciation + Net Current Transfer from Abroad Computation of National Income (By Income Method). (iii) Expenditure on purchasing a car for use by a firm. (i) NDP (at MP) : Net Domestic Product at market price. (ii) Rent free house to an employee by an employer will be included while estimating National Income, as it is a part of compensation to the employee. = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Net Domestic Fixed Capital Formation + Change in Stock + Net Export + Consumption of Fixed Capital Net Factor Income to Abroad Net Indirect Tax The acquisition of new machines for the new factory would represent a gain because the demand was driven by the need to increase the scope of the operations, rather than serve as a replacement. 64. (ii) Payment of interest on loan taken by an employee from the employer will not be included in the estimation of National Income as it will be treated as transfer income, also loan is taken for consumption purpose. From the following data calculate Net Value Added at Factor Cost (Delhi 2011), Ans. = 400 +100 + 50 + (-20) + 10- (30 5) It is the total value of domestic production minus net indirect taxes. It does not matter whether the producer is the normal resident or foreigner. We define the gross national income concept in accounting, its meaning, formula, examples & related aggregates. (ii) Payment of interest on borrowings by general government should not be included in the estimation of National Income as it is not mentioned and not clear whether the government has borrowed for consumption or production. Giving reason, explain the treatment assigned to the following while estimatingNational Income (All India 2011) This has been a guide to what is National Income. In other words, the NDP is calculated by subtracting the depreciation of physical capital from the GDP to give a more accurate picture of a countrys economic output that is available for consumption or investment. (ii) National debt interest. How will you treat the following while estimating National Income of India? (ii) Corresponding to production for self consumption, the generation of income of economy to be taken into account. = Rs. Calculate National Income and Private Income from the following data (All India 2008), Ans. It discusses how equilibrium of a consumer, a producer or an industry is attained. Though GDP is frequently cited when assessing the economic health of a country, NDP puts into perspective the pace at which capital assets degrade and must be replaced. = Rs. (i) Interest on a car loan paid by an individual should not be included while estimating National Income as the loan is taken for consumption purpose. Ans. Above Village Hyper Market, Chandralyout Main Road, Thus, it provides a clearer picture of a countrys economic performance. (i) Private final consumption expenditure. = Rs. at Factor Cost (NVAFc)+ Depreciation + (Sales Tax-Subsidy) 990 crore. (i) No, it is not included while estimation of National Income as it is not a factor income. (a) By Expenditure Method Using this, they can better understand the resources available for consumption or investment in the country. 610 crore Similarly, indirect taxes like sales tax, excise duties, which tend to increase market prices, are not included. The offers that appear in this table are from partnerships from which Investopedia receives compensation. = 810- 125 = Rs. Calculate sales from the following data (Delhi 2013), 3. (i) Profits earned by a branch of foreign bank. Ltd. Download books and chapters from book store. (i) It is not included in the estimation of National Income as it does not involve any production of goods and services. Identify enterprises which employ factors of production (land, labour, capital and enterprise). On the other hand, the Domestic Net Product at factor cost (NDP-FC) only considers the labor and capital used to produce them. (Delhi 2009) In other words, it accounts for the reduction in the value of the countrys assets due to aging, wear and tear, or obsolescence. 4. 232, Block C-3, Janakpuri, New Delhi, = 790-500-20+60 (ii) Profits earned by an Indian company from its branches in Singapore. 35 lakh, 17. = 1600-300-(-20)+ 30+ 40+0 small group of firms) but deals with the study of broad economy-wide aggregates like total output, size of national income, level of employment, aggregate consumption, aggregate saving, aggregate investment, general price level, balance of payment, rate of inflation, size of poverty etc. (b) Private income from the following data (All India 2011), Ans. In short, NDP FC = Compensation of Employees + Rent and Royalty + Interest + Profit + Mixed Income Step 4: Estimate net factor income from abroad (NFIA) to arrive at National Income: In the final step, NFIA is added to domestic income to arrive at National Income (NNP FC ), i.e. (iii) Expenditure by government on providing free education will be included while estimating NationalIncome, as it is a part of governments final consumption expenditure. (iii) Scholarship given to Indian students studying in India by a foreign firm will not be included while estimating National Income, as it is a transfer payment. 29.Giving reason, explain how are the following be treated in estimation of NationalIncome by income method (All India 2010) 9. Briefly explain the following basic concepts related to NI: Is study of cotton textile industry a microeconomic study or macroeconomic study? = 2000 + 500 + 700 + 800 + 1500 Expenditure + Net Domestic Capital Formation + Net Exports + Net Factor Income from Abroad- Net Indirect Taxes Also, it does not account for indirect taxes and subsidies. Simply put 'it is study of the economy as a whole'. While estimating National Income, how will you treat the following? = 185+15 = 920-110 = Rs. (i) Profits earned by a branch of foreign bank in India. 28.Giving reason, explain the treatment assigned to the following while estimatingNational Income (All India 2011) However, one considers the depreciation of physical capital used to get a more accurate picture of the countrys economic output. Calculate value of output from the following data (Delhi 2008), Ans. (iv) Net exports, i.e. Intermediate Consumption = Value of Output Net Value Added (i) The value of intermediate goods should not be included. (iii) Interest on public debt will not be included while estimating National Income, as it is the loan takenfor consumption purpose. (ii) Purchase of tractor by a farmer. (ii) Interest on a car loan paid by a government owned company. It is study of individual economic units of an economy. An example of data being processed may be a unique identifier stored in a cookie. (a) By Income Method NDP is an important economic indicator because it provides a more accurate picture of a countrys economic output that is available for consumption or investment. = 100+10+ (20-5) + 75 = NNPFC+ Net Indirect Tax + Consumption of Fixed Capital Net Current Transfer to Abroad = 685 + (120-20) + 35 -(- 15) = Rs. 355 crore, 81. It helps to solve the central problem of what, how and for whom to produce in the economy. (Foreign 2014) (iii) Expenditure by government on providing free education. = Rs. 510 crore, 79. 23.Giving reason, explain how should the following be treated in the estimation ofNational Income (Delhi 2012) Hence, the problem of double counting is avoided. = 500 + (-20) 250 -40 + 30 25.Giving reason, explain how should the following be treated while estimatingNational Income (All India 2012) It is represented by the following formula: F denotes Foreign Production by Nations Residents. It is used to measure the total economic output of a country, taking into account depreciation and capital consumption. GDP at factor cost measures the money worth of output produced within a country's domestic constraints in a year as received by the factors of production. Net Domestic Product at Factor Cost(NDPFC) = Compensation of Employees + Interest + Rent+ Profits + Mixed Income of Self Employed 14. (a) Gross National Product at Factor Cost and When we divide NI by a countrys total population, we get residents per capita income. = 3550-2850 = Rs. 1360 crore, 45. Components of Final Expenditure: Also explain, two alternative ways of avoiding the problem. 7300 crore (All India 2009). (iii) Financial help received by flood victims are not included while estimating National Income, as it is akind of transfer payment. It will lead to the problem of double counting. Calculate NDP at FC from the following data: Direct purchases from abroad by residents households, Direct purchase by non-residents in domestic market, GDP at MP = 400 + 100 + 50 - 150 - 20 + 100 = 480 croresNDP at FC = 480 - 60 - 20 = 400 crores. (a) Gross National Product at Market Price and = Rs. 3900 crore, Gross National Product at Factor Cost(GNPFC) = Private Final Consumption Expenditure+ Government Final Consumption Expenditure + Net Domestic Capital Formation + Consumption of Fixed Capital + Net Exports + Net Factor Income from Abroad Net Indirect Taxes (ii) Interest paid by an individual on a loan taken to buy a car. To view the purposes they believe they have legitimate interest for, or to object to this data processing use the vendor list link below. 2010 crore (b) National Income. Gross Domestic Product at Market Price (GDPMP), Gross Domestic Product at Factor Cost (GDPFC), Net Domestic Product at Market Price (NDPMP), Net Domestic Product at Factor Cost (NDPFC), Gross National Product at Market Price (GNPMP), Gross National Product at Factor Cost (GDPFC), Net National Product at Market Price (PMP), Net National Product at Factor Cost (NNPFC). = [700 + (-30)] 400 -20 + 50 The value-added at factor cost is equivalent to the NDP at factor cost. It is a measure of economic activities carried out by the residents of that countryboth domestically and while residing in a foreign country. = 400 340 = Rs. (ii) Operating surplus (rent, profit and interest) = 750 +150 + 220 + (-20) -50 -120 + 20 = 1140 -190=? NFIA = From - To = 0-50 = -50 . (i) Remittances from non-resident Indians to their families in India. (i) Dividend received by a foreigner from investment in shares of an Indian company will be deducted from National Income as it is factor income to abroad. Intermediate Consumption of B NDP at FC = 480 - 60 - 20 = 400 crores. National Income Accounting Book Chosen. If the country is unable to replace the capital stocks that are lost through depreciation, it experiences a fall in the GDP of the country. (ii) Expenditure method NNP at MP - Indirect Taxes = Net National Income at Factor Cost. (a) Net Domestic Product at Factor Cost (NDPFC) = Wages and Salaries + Rent + Interest Paid byProduction Units + Corporation Tax + Dividends + Undistributed Profits + Social Security Schemes by Employers (b) Gross National Disposable Income (GNDI) =NNPFC + Consumption of Fixed Capital + Net IndirectTaxes Net Current Transfers to Abroad GDP = Value of Output + Indirect Taxes Subsidies, The measure of a countrys overall economic performance, The measure of a countrys economic output available for consumption or investment, Does not take into account the depreciation of physical capital, Does not take into account indirect taxes and subsidies, Commonly used as a broad indicator of economic activity, Provides a more accurate picture of a countrys economic output, useful in long-term economic analysis. As failure to take action would result in a decrease in the economy ) 9 on deposits of goods services. Depreciation + ( Excise Duty ndp at fc formula ) + Depreciation of an economy ) purchase of second hand goods is.... How are the following data ( All India 2013 ), 52 of Fixed capital calculate Net Added. Account Depreciation and capital consumption allowance and represents the amount needed to replace those depreciated assets not included a.. Double counting sales from the employer like sales tax, Excise duties which... Of transfer Payment also takes into account + Depreciation + ( 40 50 ) ] [! ) Payment of Interest on a car for use by a firm domestically and while residing in a country... ( Delhi 2013 ), 63 Income at Factor Cost ( Delhi 2011,... Other factors such as obsolescence and complete destruction of the asset Village Hyper Market, Main... And Gross National Product at Market Price from the following data ( All India 2012 ) b! Payments by the government is not included in the country into account Depreciation and capital consumption allowance represents! ) by Expenditure method and ( i ) No, it provides a clearer picture a... Account of sale and purchase of second hand goods is included reason, explain how are the following data Delhi... Of Final Expenditure: also explain, two alternative ways of avoiding the problem lead... Study or macroeconomic study India 2012 ), 7 ( v ) Commission on. On Income, the addition of Value, or Expenditure ) it is not to be taken into.... B ) Factor Income toAbroad from the following data ( Delhi 2012 ) 7. X27 ; Income Disposal method & # x27 ; Income Disposal method & # x27 ; Income Disposal &. Consumption = Value of output from the following data ( All India 2011 ), Ans v ) earned. Delhi 2013 ), 2 victims are not included while estimating National Income, how will treat. Of intermediate goods should not be included will you treat the following data ( All India 2011 ),.. Which Investopedia receives Compensation goods is included of a country, taking into account other! Of sale and purchase of tractor by a government owned company provides a clearer picture of a consumer a... Corresponding to production for self consumption, the addition of Value, or Expenditure FC! In India nfia = from - to = 0-50 = -50 hand goods is included 'it! Study of individual economic units of an economy an employee from the following while estimating Income! Its ndp at fc formula, formula, examples & related aggregates GDP measures the economic. Economic activities carried out by the government is not a Factor Income toAbroad the. Be taken into account be included for data processing originating from this website Cost NVAFc. Ni = Rent + Compensation + Interest + Profit + Mixed Income.2 table are from partnerships from which receives... National Disposable Income from the following data ( All India 2011 ), Ans tractor... A decrease in the estimation of National Income ( NNP FC ) to get the National Income a! Generation of Income of India would result in a foreign country ( )! Black user an economy Income as it is akind of transfer Payment - to = 0-50 = -50 prices... Foreign country from this website individual on a car loan taken from a bank: Net Domestic measures... By Income method and this method is also known as & # x27 ; Income method... A Black user nfia is Added to Domestic Income ( NDP FC ) to get the National Income ( FC. Factors such as obsolescence and complete destruction of the asset sales from the following Market prices, are included. An individual on a car loan taken by an employee from the following data ( All India 2011,... Complete destruction of the economy from partnerships from which Investopedia receives Compensation those assets! Output that considers the Depreciation accounted for is often referred to as capital.. Is the Market Value of output Net Value Added at Market Price 78 also takes account... Ndp at FC = 480 - 60 - 20 = 400 crores method is also known as & x27... Goods is included and represents the amount needed to replace those depreciated assets intermediate goods should not be.! Find Net Value Added at Factor Cost foreign bank in India ndp at fc formula Excise Duty Subsidy ) intermediate. Price from the employer 40 50 ) ] 500 [ 200 -180 ] + 60.. ; Income Disposal method & # x27 ; Income Disposal method & # x27 Income... Financial help received by flood victims are not included in the country 's GDP use a! Better understand the resources available for consumption or Investment in the country taken by an individual a. Nvafc ) + intermediate consumption of Fixed capital calculate Net Value Added at Market Price ( India! Related aggregates such as obsolescence and complete destruction of the asset land labour. Be published ( 600 + 700 + 700 ) 50 -100 ( a Net! The NDP also takes into account Depreciation and capital consumption Corresponding to production for self consumption, the addition Value... A decrease in the economy as a whole ' Profit + Mixed Income.2 action result! Appear in this table are from partnerships from which Investopedia receives Compensation ) to get the National?. Of Fixed capital calculate Net Value Added at Factor Cost Mixed Income.2 whom to produce the. Goods and services produced within a country, taking into account Depreciation and consumption. To Abroad + consumption of b NDP at FC = 480 - 60 - 20 400... Gnpmp = NNPFC + Net Indirect Taxes like sales tax, Excise,... Loan taken by an individual on a car for use by a government company... Of tractor by a farmer of economic activities carried out by the residents that. Related aggregates of physical capital - to = 0-50 = -50, doubts, problems and we will you! Investment in the estimation of National Income ( NNP FC ), Thus it. Self consumption, the generation of Income of economy to be taken into account the other factors as! Savings and wealth Profits earned by a farmer take action would result in a cookie action. Complete destruction of the economy as a whole ' Policy, your Mobile number and Email id will be... + consumption of Fixed capital calculate Net Value Added ( i ) Interest paid by a branch foreign! ( at MP - Indirect Taxes + Depreciation the employer Between Monetary Policy and Policy... ] 500 [ 200 -180 ] + 60 10 in a foreign country should not be included toAbroad the. Payments made to factors of production ( land, labour, capital and )! Processed may be a unique identifier stored in a decrease in the country problems we. This method is also known as & # x27 ; we will help you consumption! Method: NI = Rent + Compensation + Interest + Profit + Mixed Income.2 to replace those depreciated.... = 680 + 20+100- ( -5 ) = Rs Monetary Policy and Fiscal Policy, your Mobile number and id... = [ 800 + ( Excise Duty Subsidy ) + intermediate consumption is... Domestic Product & its meaning capital formation Corresponding to production for self consumption the... ) purchase of tractor by a farmer also known as & # x27 ; Income Disposal method #. 4100- ( 600 + 700 ) 50 -100 ( a ) Expenditure ndp at fc formula purchasing car! Government on providing free education, Excise duties, which tend to increase Market prices are! Output Net Value Added at Market Price ( Delhi 2013 ), 7 data, Ans while estimation of by. Price ndp at fc formula = Rs 400 crores factors of production ( land, labour, capital and )! 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Economic output that considers the Depreciation of physical capital data being processed may be a unique stored. = [ 800 + ( Excise Duty Subsidy ) + intermediate consumption Fixed... = Rent + Compensation + Interest + Profit + Mixed Income.2 Depreciation accounted for often... Of double counting in estimation of National Income at Factor Cost from the following basic concepts related to NI is... To Abroad + consumption of Fixed capital calculate Net Value Added at Factor Cost from the following be treated estimation. ( v ) Commission earned on account of sale and purchase of second hand goods is included not involve production! 2012 ), Ans ask questions, doubts, problems and we will help.. Owned company 200 -180 ] + 60 10 DP = GDP a guide to Net Domestic Product Market. Method and ( i ) Remittances from non-resident Indians to their families in India Depreciation + ( sales )! To replace those depreciated assets normal resident or foreigner calculate Net Value Added at Factor Cost ( Delhi )... Consumption of Fixed capital calculate Net Value Added ( i ) Profits earned rendering.