Answer to Question #135590 in Macroeconomics for Bakwe

Question

GDP at market prices R397bn
Net primary income payments to the rest of
the world
R37bn
Indirect taxes R23bn
Subsidies R11bn
Consumption of fixed capital R32bn
1 Calculate the value of gross national income (GNI) at market prices.
2 Calculate the value of net national product (NNI) at market prices.
3. Calculate the value of net national income (NNI) at factor cost.

Answer 1

a) Gross National Income (GNI) = GDP + Net payments to the world + Taxes - Subsidies - Consumption of fixed assets

= R (397 $+$ 37 $+$ 23 $-$ 11 $-$ 32) bn

= R 414bn

b) Net National Product(NNI) at Market Prices.

=GDP _fc − Consumption of fixed capital − Net Primary income payments to the rest of the world.

=[(397$+$ 32) $-$ 32$-$ 37]

=R 360bn

c) NNI at Factor cost =NNI at Market Price +Subsidies $-$ Indirect taxes

=(360+11$-$23 )

=R 348bn