Residents receive ₹610 crore as factor income from abroad, while foreigners receive ₹760 crore from the country. If NNP is ₹8,600 crore, what is NDP?
Answer and explanation
Correct answer: ₹8,750 crore
Net factor income from abroad is NFIA = factor income received from abroad − factor income paid to foreigners = 610 − 760 = −₹150 crore. The relationship is NNP = NDP + NFIA. Therefore, NDP = NNP − NFIA = 8,600 − (−150) = ₹8,750 crore. Since NFIA is negative, NDP is ₹150 crore higher than NNP; simply choosing ₹8,600 ignores the foreign-income adjustment.
Frequently asked questions
What is the correct answer to this question?
₹8,750 crore
Why is this the correct answer?
Net factor income from abroad is NFIA = factor income received from abroad − factor income paid to foreigners = 610 − 760 = −₹150 crore. The relationship is NNP = NDP + NFIA. Therefore, NDP = NNP − NFIA = 8,600 − (−150) = ₹8,750 crore. Since NFIA is negative, NDP is ₹150 crore higher than NNP; simply choosing ₹8,600 ignores the foreign-income adjustment.
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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