Page 30 - DECO402_Macro Economics

Unit-2: National Income : Concept of National Income

Net Domestic Product at Factor Cost (NDP ) = Compensation of employees Notes
FC
+ Rent
+ Interest
+ Profit = operating surplus
+ Mixed income of selfemployed
In this adding net indirect taxes, we will get Net Domestic Product at Market Price (NDP )
MP
means
NDP = NDP + Net Indirect Taxes
MP FC
In this (NDP ) adding depreciation, we will get Gross Domestic Product at Market Price (GNP )
MP
MP
means
GDP = NDP + Depreciation
MP MP

(v) Gross National Product at Market Price (GNP )
MP
Using value addition, it is in a financial year produced under domestic boundary final goods and
services’ market value, in which from abroad net factor income is included. Hence
Gross National Product at Market Price = Gross Domestic Product at Market Price + Net Factor
Income from Abroad
GNP = GDP + Net factor income from abroad
MP
MP
(vi) Gross National Product at Factor Cost (GNP )
FC
When net indirect taxes is deducted from gross national product at market prices, then we get gross
national product at factor cost.
Gross National Product at Factor Cost = Gross National Product at Market Price – Net indirect
taxes
GNP = GNP – Net indirect taxes
MP
FC
(vii) Net National Product at Market Price (NNP )
MP
When depreciation is deducted from gross national product at market price, then we get net national
product at market price.
Net National Product at Market Price = Gross National Product at Market Price – Depreciation
NNP = GNP – Depreciation
MP MP

(viii) Net National Product at Factor cost (NNP )
FC
When net indirect taxes is deducted from net national product at market price then we get net national
product at factor cost.
Net National Product at Factor Cost = Net National Product at Market Price – Net indirect taxes
NNP = NNP – Net Indirect Taxes
FC MP

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