Chapter 2 National Income - Part 2 Concept of GDP and GNP

Economics Class 12
Macroeconomics

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### Transcript

TYPES OF GDP TYPES OF GNP We have already studied that GDP is of 2 types GDP at Factor Cost (GDPFC ) GDP at Market Price (GDPMP ) Similarly, GNP is also of 2 types GNP at Factor Cost (GNPFC) GNP at Market Price (GNPMP) Relation between the two Relation between the two GDPFC = GDPFC = GDPMP - Net Indirect Taxes GDPMP - (Indirect Taxes- Subsidy) GNPFC = GNPFC = GNPMP - Net Indirect Taxes GNPMP - (Indirect Taxes- Subsidy) Difference between GNPMP and GNPFC GNP at Market Price GNPMP GNP at Factor Cost GNPFC It is Gross Market value of all final goods and services produced by Normal Residents of a Country It is Gross Money value of all final goods and services produced by Normal Residents of a Country It includes Net Indirect Taxes It does not Include Net Indirect Taxes GNPFC = GNPFC = GNPMP - Net Indirect Taxes GNPMP -(Indirect Taxes- Subsidy) It is not considered for calculating National Income It is considered for calculating National Income