Question

find NDP at Factor cost from the following data:

i. gross domestic fixed investment . 10,000

ii. inventory invetment 5,000

iii. depreciation 2,000

iv. indirect taxes 1,000

v. Subsidies 2,000

vi. consumption expenditure 20,000

vii. residential consumption expenditure 6,000

why isnt residential consumption expenditure included in calculating NDP?

Answer 1

NDP_​FC​ = gross domestic fixed investment +inventory investment+ consumption expenditure+depreciation -indirect taxes+subsidies
=10,000+5000+20,000+2,000-1000+2000
=34,000
Residential consumption expenditure is not included in calculating NDP as it is already included in ​gross domestic fixed investment.