when is gdp of an economy equal to its gnp?
Define gross national disposable income.
When will Domestic factor income be less than national income and when it will be greater than national income?
We know, Gross National Income = Gross Domestic Income + Net Factor Income from Abroad
Net Factor Income from Abroad = Factor Income earned from Abroad- Factor Income Paid Abroad
Thus, Gross National Income (GNP) will be equal to the Gross Domestic Income(GDP) when Net Factor Income from Abroad is equal to zero.
Or in other words when, Factor income earned from Abroad is equal to Factor Income Paid Abroad.
Gross National Disposable Income is that part of the Gross National Income that is available to all the normal residents of the country for consumption and savings.
Gross National Disposable Income = National Income + Net Indirect Taxes + Net Transfer Payments from Rest of the World + Depreciation
Domestic Factor Income will be less than the National Income when Factor income earned from Abroad is more than Factor income paid Abroad.
Domestic Factor Income, on the other hand, will be greater than the National Income when Factor income paid Abroad is more than the Factor income earned from Abroad.