Residents receive ₹530 crore as factor income from abroad and foreigners receive ₹640 crore from the country. If NNP is ₹7,800 crore, what is NDP?
Answer and explanation
Correct answer: ₹7,910 crore
First calculate NFIA: income received from abroad minus income paid to foreigners = ₹530 − ₹640 = −₹110 crore. The relationship is NNP = NDP + NFIA. Therefore NDP = NNP − NFIA = ₹7,800 − (−₹110) = ₹7,910 crore. Option C is correct. The negative NFIA must be subtracted, which increases NDP relative to NNP; option A uses the wrong sign.
Frequently asked questions
What is the correct answer to this question?
₹7,910 crore
Why is this the correct answer?
First calculate NFIA: income received from abroad minus income paid to foreigners = ₹530 − ₹640 = −₹110 crore. The relationship is NNP = NDP + NFIA. Therefore NDP = NNP − NFIA = ₹7,800 − (−₹110) = ₹7,910 crore. Option C is correct. The negative NFIA must be subtracted, which increases NDP relative to NNP; option A uses the wrong sign.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - NDP.
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