Answer to Question #87823 in Macroeconomics for Molly

Question

Given GDP at market price=12000, depreciation = 1500,subsidies =300
Calculate NDP at factor cost

Answer 1

Solution:

$$NDPfc=NDPmp - D$$

where, NDPfc - Net Domestic product at factor cost, NDPmp - Net Domestic product at market prices, D - depreciations,

$$NDPmp = GDPmp + S$$

where, GDPmp - Gross Domestic product at market prices, S - subsidies.

In this way:

$$NDPmp = 12000 + 300 = 12300$$

$$NDPfc = 12300 - 1500 = 10800$$

Answer: NDP at factor cost is 10800