Aggregates related to national income - NNP

First, the movement from GNP at market price to GNP at factor cost removes net indirect taxes: 54,000 − 2,200 = 51,800. Depreciation is found by comparing gross and net national product at the same factor cost. Since NNP at factor cost = GNP at factor cost − depreciation, depreciation = 51,800 − 49,200 = 2,600. Therefore, option B is correct.

Three adjustments are required. Add NFIA to convert a domestic aggregate into a national aggregate; subtract depreciation to convert gross into net; and subtract NIT to convert market price into factor cost, because MP = FC + NIT. Combining these steps gives NNP at FC = GDP at MP + NFIA − Depreciation − NIT. Therefore, option A has every adjustment with the correct sign.

Use the combined conversion formula: NNP at FC = GDP at MP + NFIA − Depreciation − NIT. Substitution gives ₹2,200 + ₹150 − ₹300 − ₹90 = ₹2,350 − ₹390 = ₹1,960 crore. NFIA raises the domestic value to a national value, while depreciation and NIT are deducted for the net and factor-cost measures. Thus option A is correct.

The conversion is: NNP at factor cost = GDP at market price + NFIA − depreciation − NIT. NFIA changes the measure from domestic to national, depreciation changes gross to net, and subtracting net indirect taxes changes market price to factor cost. Thus the correct sequence is to add NFIA, subtract depreciation, and subtract NIT.

Use the conversion formula: NNP at factor cost = GDP at market price + NFIA − depreciation − NIT. Substituting the values gives ₹2,000 + (−₹50) − ₹180 − ₹120 = ₹1,650 crore. The negative NFIA must be added algebraically, so it reduces the result by ₹50 crore.

The relationship is NNP at factor cost = NNP at market price − net indirect taxes. Net indirect taxes (NIT) equal indirect taxes minus subsidies. If subsidies are greater than indirect taxes, NIT is negative. Subtracting a negative number increases the value, so NNP at factor cost is greater than NNP at market price.

The formula is NNP at market price = NNP at factor cost + NIT. Therefore, NNP at market price = ₹900 + (−₹40) = ₹860 crore. Because NIT is negative when subsidies exceed indirect taxes, adding NIT reduces the market-price aggregate below the factor-cost aggregate.

First calculate net indirect taxes: NIT = indirect taxes − subsidies = ₹90 − ₹30 = ₹60 crore. Then convert gross to net and market price to factor cost: NNP at factor cost = GNP at market price − depreciation − NIT = ₹1,500 − ₹100 − ₹60 = ₹1,340 crore. Therefore, option B is correct.

To move from GDP at factor cost to NNP at factor cost, first add NFIA to change domestic into national, and then subtract depreciation to change gross into net. The formula is NNP_FC = GDP_FC + NFIA − depreciation. Hence, ₹1,800 + ₹100 − ₹150 = ₹1,750 crore. No NIT adjustment is needed because the figures are already at factor cost.

National income is NNP at factor cost. First calculate net indirect taxes: NIT = indirect taxes − subsidies = ₹150 crore − ₹60 crore = ₹90 crore. Then convert market price to factor cost: NNP_FC = NNP_MP − NIT = ₹1,200 crore − ₹90 crore = ₹1,110 crore. Therefore, national income is ₹1,110 crore.

Convert domestic to national by adding NFIA, and convert market price to factor cost by subtracting net indirect taxes. Since the given measure is already net, depreciation is not involved: NNP_FC = NDP_MP + NFIA − NIT = 1000 + 80 − 50 = ₹1030 crore. Thus option A is correct.

Two conversions are required. First, national is changed to domestic by subtracting NFIA: NDP = NNP − NFIA. Second, market price is changed to factor cost by subtracting net indirect taxes: FC = MP − NIT. Therefore, NDP₍FC₎ = NNP₍MP₎ − NFIA − NIT. Depreciation is not adjusted because both aggregates are already net.

To convert NNP at market price into NDP at factor cost, first remove NFIA because national income must be converted into domestic income, and then subtract NIT because market prices include net indirect taxes. Thus, NDPₘₚ = NNPₘₚ − NFIA = 1,000 − 40 = ₹960 crore. Therefore, NDP𝒇𝒄 = NDPₘₚ − NIT = 960 − 70 = ₹890 crore. Hence, option A is correct.

Cooking for one’s own family is a non-market household service. Since it is not normally sold, there is no observed market price for valuing the service, and estimating its value reliably and consistently is difficult. National-income accounting therefore generally excludes such unpaid household services, although an equivalent paid service would be counted.

NDPFC is already net, meaning depreciation has already been deducted, and it is already measured at factor cost. To obtain NNPFC from NDPFC, only net factor income from abroad is added: NNPFC = NDPFC + NFIA. The other starting aggregates are gross and therefore require a depreciation adjustment before reaching a net aggregate.

National income is NNP at factor cost. Starting with NDPMP, first remove net indirect taxes to obtain NDPFC: ₹850 − ₹90 = ₹760 crore. Then add NFIA to convert domestic to national: ₹760 + (−₹20) = ₹740 crore. Since the given figure is already net, no depreciation is deducted.

Use the complete conversion formula: NNPFC = GDPMP + NFIA − depreciation − NIT. Substituting the values gives 4800 + (−120) − 430 − 260 = 4680 − 430 − 260 = ₹3990 crore. The negative NFIA reduces GNP relative to GDP, while depreciation and NIT are also deducted. Thus, option A is correct.

GNP_FC is already a national aggregate because it includes NFIA, and it is valued at factor cost. To convert gross into net, depreciation must be deducted. To convert factor cost into market price, net indirect taxes (NIT) must be added. Therefore, NNP_MP = GNP_FC − depreciation + NIT, making option A correct.

First convert GNP_FC into NNP_FC by deducting depreciation: 3900 − 510 = 3390 crore. Then convert factor cost into market price by adding NIT. Since NIT is −70 crore, the adjustment is 3390 + (−70) = 3320 crore. Thus, NNP_MP is 3320 crore, so option A is correct.

First calculate net indirect taxes: NIT = indirect taxes − subsidies = 420 − 520 = −100 crore. The relationship is NNP_MP = NNP_FC + NIT, so NNP_FC = NNP_MP − NIT. Therefore, NNP_FC = 2950 − (−100) = 3050 crore. Because NIT is negative, factor-cost income is higher than market-price income in this case. Option C is correct.

Factor income is earned by supplying a factor of production—labour, land, capital, or entrepreneurship—to current production. Wages, rent, interest on productive capital, profits, and the mixed income of self-employed persons are factor rewards. Interest paid on public debt is generally treated as a transfer payment in this context because it is not a payment for a current productive service, so it is excluded from factor income.

To convert GDP at market price into NNP at factor cost, three adjustments are required. Add NFIA to move from domestic to national income, subtract depreciation to move from gross to net income, and subtract net indirect taxes to move from market prices to factor cost. Thus NNPFC = GDPMP + NFIA − depreciation − NIT, so these are the three key components.

Use the conversion formula NNPFC = GDPMP + NFIA − depreciation − NIT. First calculate NNP at market price: 7,000 + 160 − 520 = 6,640 crore. Therefore, 6,180 = 6,640 − NIT, so NIT = 6,640 − 6,180 = 460 crore. Hence option A is the only numerically correct answer.

First convert NNP at factor cost to NNP at market price by adding net indirect taxes: NNPMP = NNPFC + NIT = 8,200 + 400 = ₹8,600 crore. The relation between gross and net national product at the same market-price basis is GNPMP = NNPMP + depreciation. Therefore, depreciation = 9,000 − 8,600 = ₹400 crore.

National income is based on the income of normal residents, whereas domestic income is based on production within the domestic territory. Factor income earned in the territory by foreign companies belongs to non-residents and is therefore a payment to the rest of the world. NFIA is factor income received from abroad minus factor income paid abroad, so this income reduces NFIA. It is not depreciation or an indirect tax.