question_answer

Calculate net domestic product at factor cost from the following:
(Rs. Arab)
(i)	Net current transfers to abroad	5
(ii)	Government final consumption expenditure	100
(iii)	Net indirect tax	80
(iv)	Private final consumption expenditure	300
(v)	Consumption of fixed capital	20
(vi)	Gross domestic fixed capital formation	50
(vii)	Net imports	(-)10
(viii)	Closing stock	25
(ix)	Opening stock	25
(x)	Net factor income to abroad	10

Answer:

National Domestic Income at Factor Cost = Private Final Consumption Expenditure + Government Final Consumption Expenditure - Net Imports + (Gross Domestic Fixed Capital Formation + Closing stock -- Opening stock) - Depreciation - Net Indirect Taxes or, National Income (\[ND{{P}_{FC}}\]) =\[300+100-(-10)+(50+25-25)-20-80\]= Rs. 360 Arab.