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In Business / High School | 2025-07-08

Calculate GDP at Market Price (MP) using the following data: | S.No | Particular | ₹ in cr | |-------|---------------------------|---------| | i | National income | 6,700 | | ii | Consumption of Fixed Capital | 180 | | iii | Factor income from abroad | 100 | | iv | Indirect Taxes | 130 | | v | Subsidies | 70 | | vi | Factor income to abroad | 150 |

Asked by ljosie289

Answer (1)

To calculate GDP at Market Price (MP), we need to adjust National Income by adding Indirect Taxes and subtracting Subsidies. However, we first need to consider the effect of factor income from and to abroad because the initial figure provided is National Income, which refers to Net National Product at Factor Cost (NNP at FC). Let's proceed step-by-step:

Start with National Income (NI) : This is given as 6,700 crore.

Adjust for Net Factor Income from Abroad (NFIA) : NFIA = Factor income from abroad − Factor income to abroad NFIA = 100 − 150 = − 50 Thus, to convert the National Income to domestic level, we adjust for NFIA.

Convert National Income to Gross Domestic Product at Factor Cost (GDP at FC) : Since National Income is Net National Product at Factor Cost (NNP at FC), we need to add Consumption of Fixed Capital to account for depreciation. GDP at FC = NNP at FC + Depreciation − NFIA GDP at FC = 6 , 700 + 180 − ( − 50 ) = 6 , 700 + 180 + 50 = 6 , 930

Adjust for Taxes and Subsidies to get GDP at Market Price (MP) : GDP at MP = GDP at FC + Indirect Taxes − Subsidies GDP at MP = 6 , 930 + 130 − 70 = 6 , 990


Therefore, the GDP at Market Price is ₹ 6,990 crore .

Answered by OliviaLunaGracy | 2025-07-21

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