Question

if factor income received from abroad is equal to factor income paid abroad then which of the following is not a valid statement and state your reasons?
(a) - national income= domestic income
(b) - NDP at factor cost + dep=GNP at factor cost
(c)- NDP at factor cost + dep=GNP at market price
(d) - all are valid

Answer 1

Dear student, NDP(at factor cost) + Depreciation = GNP(at market price) is not a valid statement if factor income received from abroad is equal to factor income paid abroad. Then, NDP(at factor cost) + Depreciation+ Net indirect tax = GNP(at market price). Regards