calculate national income by expenditure and output method

gross domestic capital formation 250 crores

net exports = -250 crores

private final consumtion expenditure 1000 crores

value of output of primary sector 900

value of output of secondary sector 800

value of output of tertiary sector 400

intermediate consumtion of primary sector 400 crores

intermediate consumption of secondary sector 300

intermediate consumption of tertiary sector 100

consumption of fixed capital 80

indirect taxes 100

govt final consumtion expenditure 100

subsidies 10

net factor income from abroad -20 crores

The answer provided by Bhumika is correct. However, in calculation of national income by Expenditure Method,

the formula given, GDPMP=C+I+G+X-M is inappropriate here.

The correct formula is just

= private final consumption expenditure+ gross domestic capital formation+ government final consumption expenditure

 + net exports

 

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Value addition by primary sector = value of output of primary sector-intermediate consumtion of primary sector

=900-400=500

Value addition by secondary sector= value of output of secondary sector-intermediate consumption of secondary sector 

=800-300=500

Value addition by tertiary sector=value of output of tertiary sector-intermediate consumption of tertiary sector 

=400-100=300

NIT= IT- Subsidy

=100-10

=90

 

National Income with Output method

GDPMP=Value addition by primary sector +Value addition by secondary sector +Value addition by tertiarysector 

=500+500+300

=1300

 

 NNPFC = GDPMP-depreciation-NIT+NFIA

=1300-80-90-20

=1110

 

National Income with Expenditure method

GDPMP=C+I+G+X-M

=private final consumtion expenditure+gross domestic capital formation+govt final consumtion expenditure+net exports

=1000+250+100-250

=1100

 

 NNPFC = GDPMP-depreciation-NIT+NFIA

=1100-80-90-20

=910

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