Answer to Question #199208 in Macroeconomics for kauser

Question

You are given the following data. Calculate GNP and GDP at factor cost.

GNPMP 600

Indirect Taxes 50

Subsidies 30

NFIA 100

Depreciation 50

Transfer payments 15

Retained Earnings of Companies 25

Personal Taxes 15

Personal Savings 80

Answer 1

$Given, \\GNP_{MP} = 600$

$GDP_{MP}=GNP_{MP}− Net \space factor \space income \space from \space abroad\space \\GDP_{MP} = 600 − 100\\GDP_{MP} = 500$

Now find the GDP at $FC$ from GDP at MP.

$GDP_{FC}=GDP_{MP}$ −Net Indirect Taxes

Net Indirect Taxes=Indirect taxes − subsidies

Net Indirect Taxes$=50 − 30 = 20$

 

$GDP_{FC}= GDP_{MP}−Net\space Indirect\space Taxes\\ GDP_{FC}=500−20=480$

Now find GNP at$FC$ .

$GNP_{FC}=GDP_{FC}+NFIA\\ GNP_{FC}=480+100=580$

 

Answer.

$GNP_{FC}=580\\GDP_{FC}=480$