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Question
Calculate 'National Income' and 'Net National Disposable Income' from the following
| (Rs in Arab) | ||
| 1 | Net change in stock | 50 |
| 2 | Government final consumption expenditure | 100 |
| 3 | Net current transfers to abroad | 30 |
| 4 | Gross domestic fixed capital formation | 200 |
| 5 | Private final consumption expenditure | 500 |
| 6 | Net imports | 40 |
| 7 | Depreciation | 70 |
| 8 | Net factor income to abroad | (-)10 |
| 9 | Net indirect tax | 120 |
| 10 | Net capital transfers to abroad | 25 |
Solution
NNPfc= Private final consumption expenditure + Government final consumption expenditure + Gross domestic fixed capital formation + Net change in stocks - Net imports - Depreciation - Net indirect tax - Net factor income to abroad
= 500 + 100 + 200 + 50 - 40 - 70 - 120 - (-10)
= Rs 630 Arab
Net National Disposable Income = NNPfc + NIT - Net current transfers to abroad
= 630 + 120 - 30
= Rs 720 Arab
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