Answer to Question #165700 in Macroeconomics for Olivia Gale

Question

calculate net value added at factor cost from the following data

depreciation 20

intermediate cost 90

subsidy 5

sales 140

exports 70

change in stock (-) 10

imports of raw materials 30

Answer 1

$$solution$$

$NVA _fc=value\ of\ output-intermediate\ consumption-depreciation\\ -net\ indirect\ taxes.\\ NVA _fc =[{sales+change \ in \ stock}]{-intermediate\ consumption}-{depreciation\\ }-[{indirect\ taxes-subsidies}].\\ NVA _fc=[{140+(-10)}]-{90}-{20}-[0-5]\\ NVA _fc=[130-110+5]\\ NVA _fc=25\\$

-Note that exports are not included as sales are given and sales includes both domestic sales as well as exports.

-Import of raw material are not included separately as intermediate cost includes domestic intermediate purchases as well as import of raw materials.