CA Foundation · Business Economics · Determination of National Income
An economy's GDP at market price is ₹12,000 crore. Net factor income from abroad is −₹400 crore, depreciation is ₹900 crore, subsidies are ₹250 crore and indirect taxes are ₹1,050 crore. What is Net National Product at factor cost?
The computation gives ₹9,900 crore, which is not offered, so the keyed option is flawed.
- A9,950Correct
- B10,750
- C10,350
- D10,700
Explanation
GNP at market price = 12,000 − 400 = 11,600. NNP at market price = 11,600 − 900 = 10,700. Net indirect taxes = 1,050 − 250 = 800. NNP at factor cost = 10,700 − 800 = 9,900. Recheck: 10,700 − 800 = 9,900, not 9,950.
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