Illustration 116
Given below is the facts and figures of a nation’s fiscal system, ascertain the following.
1. GNP at Factor Cost
2. NNP at Factor Cost
3. Net Domestic Product at Factor Cost
4. Net Domestic Product at market prices
Data |
Value in Million $ |
GNP at Market Prices |
200,005 |
Net Factor Income from Foreign nation |
- 1002 |
Capital Consumption Stipend |
15,065 |
Net Indirect Taxes |
19,865 |
Solution
Given that GNP at Market Price $200,005
(i) GNP at Factor Cost is GNP
at Market Prices – Indirect Taxes
= $200,005 – 19,865
= $180,140
(ii) NNP at Factor Cost GNP at Factor Cost – Depreciation
= $180,140 – 15,065
= $165,075
(iii) NDP at Factor Cost NNP
at Factor Cost – Net Factor Earning
From
foreign nation
= $165,075 – (-
1002)
= $166,077
(iv) NDP at Market Prices NDP at Factor Cost + Indirect Taxes
= $166,077
+ 19,865
= $185,942
Illustration 117
Based on the facts and figures associating to a nation’s economy ascertain the following.
1. GNP at Market Prices
2. Private Earnings
3. Personal Earnings
4. Personal Disposable Income
Data |
Value in Million $ |
Net Domestic Factor |
182,669 |
Earnings from Domestic Product accumulating to the Government Sector |
3,245 |
Net Factor Income from Foreign nation |
-1,002 |
Indirect Taxes |
20,250 |
Subsidies |
3,200 |
Interest on National Debt |
2,010 |
Transfers from Government Administrative Department |
4,025 |
Other Current Transfer from other parts of the Globe |
2,775 |
Corporation Tax |
2,222 |
Undistributed Corporate Profits |
875 |
Direct Taxes paid by the house holds |
3,980 |
Consumption of Fixed Capital |
9,285 |
Solution:
(i) GNP at Market Prices = Net
Domestic Product at Factor Cost + Net
Factor
Income from foreign nation + Capital
Consumption
Stipend or Consumption Fixed
Capital + Indirect Taxes – Subsidies
= $182,669
+ (-1,002) + 9,285 + 20,250 – 3,200
= $291,570
To ascertain Private, Personal and Personal Disposable earnings, primarily we must find out the NNP at Factor Cost and as NDP at factor cost is by now made available in the given information. Also the sum of Transfer Payments is ought to be ascertained.
(a) NNP at Factor Cost = NDP
at Factor Cost + Net Factor Income from
Foreign nation
= $182,669
+ (-1,002)
= $181,667
(b) Transfer Payments = $4,025
+ 2,775
= $6,800
(ii) Private Earnings = NNP
at Factor Cost + Transfer Payments +
Interest
on Public Debt – Social Security
Contributions –
Income
from Government Departments – Profits
and
Surplus
of Public Corporations
= $182,669 + 6,800 +2,010 – 3,245
= $188,234
(iii) Personal Earnings = Private
Earnings – Undistributed Corporate
Profit
(or Savings of Private Corporate Sector) –
Corporation Tax
= $188,234 – 875 – 2,222
= $185,137
(iv) Personal Disposable = Personal
Earnings – Direct Taxes paid by
Income Households
= $185,137 – 3,980
= $181,157
Foot Note:
- Transfer from government administrative departments and erstwhile current transfers from the other divisions of the sphere are under the heading Transfer Payments.
- Social Security Contributions and Profits and Surpluses of Public Corporations are not provided in the given question and ought to be uncared for.
Illustration 118
The below data is presented with the facts and figures concerning a nation’s economy. Ascertain the following.
1. Net National Product at Market Prices
2. Disposable Personal Earnings
Data |
Value in Million $ |
Net Domestic Product at Factor Price |
28,470 |
Income from Domestic Product accumulating to the Government Sector |
520 |
Interest on National Debt |
460 |
Transfer Payments by Government |
320 |
Net Private donations from foreign nation |
130 |
Net earned income from foreign nation |
280 |
Indirect Taxes |
3240 |
Direct Taxes |
520 |
Subsidies |
375 |
Taxes on Corporate profits |
123 |
Undistributed Profits of Corporations |
154 |
Solution
(i) Net National Product NNP is computed as follows
NDP at Factor Price $28,470
(+) Net Earned Income
from Foreign nation $ 280
NNP at Factor Cost $28,750
(+) Indirect Taxes $ 3,240
$31,990
(-
) Subsidies $ 375
NNP at Market Price $31,615
First, in order to determine the Disposable Personal Earnings, we have to ascertain the private and Personal Earnings.
(a) Private Earnings
NNP at Factor Cost $31,615
(+) Transfer Payments by Government $ 320
(+) Net Private Donations from foreign nation $ 130
(+) National Debt Interest $ 460
$32,525
(-) Income from Domestic product accumulating $ 520
to
government
Private Earnings $32,005
(b) Personal Earnings
Private Earnings $32,005
(-
) Taxes on Corporate Profits $ 123
(- )Undistributed
Profits of Corporations $ 154
Personal Earnings $31,728
(ii) Disposable Personal Earnings is determined as follows
Private Earnings $31,728
(-) Direct Taxes
on Persons $ 520
Disposable Personal Earnings $31,208
Online Live Tutor NNP at Factor Cost, Net National Product at Market Prices:
We have the best tutors in Economics in the industry. Our tutors can break down a complex NNP at Factor Cost, Net National Product at Market Prices problem into its sub parts and explain to you in detail how each step is performed. This approach of breaking down a problem has been appreciated by majority of our students for learning NNP at Factor Cost, Net National Product at Market Prices concepts. You will get one-to-one personalized attention through our online tutoring which will make learning fun and easy. Our tutors are highly qualified and hold advanced degrees. Please do send us a request for NNP at Factor Cost, Net National Product at Market Prices tutoring and experience the quality yourself.
Online Aggregates and Dimension of National Earnings Help:
If you are stuck with an Aggregates and Dimension of National Earnings Homework problem and need help, we have excellent tutors who can provide you with Homework Help. Our tutors who provide Aggregates and Dimension of National Earnings help are highly qualified. Our tutors have many years of industry experience and have had years of experience providing Aggregates and Dimension of National Earnings Homework Help. Please do send us the Aggregates and Dimension of National Earnings problems on which you need help and we will forward then to our tutors for review.
- Consumption and Investment in Management
- Cost Push Inflation
- Economic Alleviation Under Economic Strategy
- Economic Alleviation Under Financial Strategy
- Establishment of National Earnings By Keynes
- International Linkages and Mundell Fleming Model
- Investigation of Trade Cycles
- Issues and Concepts
- Money Market Symmetry, Demand and Supply of Money
- Multiple Modular Sectors
- Nature and Costs Under Inflation
- Reparation Financial Strategy
- Synthesis of Monetary and Real Factor
