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Question

# Calculate (a) Gross domestic product at market price and (b) Factor income from abroad from the following data: (Rs in '000 crores)(i) Profits500(ii) Exports40(iii) Compensation of employees1,500(iv) Gross national product at factor price2,800(v) Net current transfer from rest of the world90(vi) Rent300(vii) Interest400(viii) Factor income to abroad120(ix) Net indirect taxes250(x) Net domestic capital formation650(xi) Gross fixed capital formation700(xii) Change in stock50

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Solution

## (a) Gross Domestic Product at Market Price GDPMP = Compensation of employees + Rent + Interest+ Profits+ Gross fixed capital formation + Change in stock - Net domestic capital formation + Net indirect taxes = (iii) + (vi)+ (vii)+ (i)+ (xi)+(xii) - (x) + (ix) =1,500+300+400+500+700+50-650+250 =1,500+300+400+500+100+250 = Rs 3,050 (in '000 crores) (b) GNPMP = GNPFC + Net indirect taxes = 2,800+250 = 3,050 (in '000 crores) Net factor income earned from abroad = GNPMP - GNPMP = 3,050 -3050= 0 ∴ Factor income from abroad - Factor income to abroad = 0. Or, Factor income from abroad -120 = 0 ∴ Factor income from abroad = 120 (in '000 crores)

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