Calculation of GNP MP by Expenditure Method

Step 1

We calculate National Income (NNP FC)

Step 2

We add Depreciation to get GNP FC

Step 3

We add Net Indirect Tax to arrive at GNP MP



Calculate GNP MP With following Data

Net indirect Taxes 200,Depreciaton 100,Profit 20,Rent 10,Mixed Income 30Royalty 50,Interest 30,Compenaton to employees 40,


Example Sheet 4.jpg


Relation between Profit, Dividend and Savings of Corporate Sector.JPG

Example 21.

Calculate GNP at MP from the following data:

Particulars  ₹ in Crores 
(i) Net indirect tax  900
(ii) Depreciation  400
(iii) Net Factor income from abroad  -20
(iv) Rent  1,000
(v) Dividend  500
(vi) Mixed Income  200
(vii) Saving of private corporate sector  400
(viii) Interest  200
(ix) Compensation of employees  100


In this question, we are not given Profit

So we will first calculate Profit

Then we will calculate

Step 1

Calculate Profit

Profit =Dividend +Savings of Corporate Sector + income Tax

Profit = 500 + 400 + 0 = 900

*assume Income tax to be 0

Step 2

Calculate National Income and GNP MP

Example 21...jpg


Question 18

Calculate GNP at MP.

Particulars   ₹  in crores 
(i) Employee Compensation  600
(ii) Rent and interest  350
(iii) Profit  200
(iv) Indirect Tax  160
(v) Consumption of fixed capital  200
(vi) Mixed Income of the self-employed  850
(vii) Subsidies  40
(viii) Net current transfers  from rest of the world  850
(ix) Net Factor income from abroad  (-)100 


Question 18.jpg


Question 19.

Calculate GNP at MP.

Particulars   ₹ in crores 
(i) Indirect tax  200
(ii) Consumption of fixed capital  100
(iii) Factor Income to abroad  250
(iv) Factor Income from abroad  320
(v) Rent  250
(vi) Dividend  220
(vii) Mixed Income  120
(viii) Saving of private corporate sector  200
(ix) Interest  100
(x) Subsidies  200
(xi) Compensation of employees  500
(xii) Corporate tax  400


Question 19.jpg


Question 20.

Calculate "Gross National Product at Market Price" from the following data:

Particulars   ₹  in crores 
(i) Compensation of employees  2,000
(ii) Interest  500
(iii) Rent  700
(iv) Profits  800
(v)Employers' contribution to social security schemes   201
(vi) Dividends  300
(vii) Consumption of fixed capital  100
(viii) Net indirect taxes  250
(ix) Net exports  70
(x) Net factor income to abroad  150
(xi) Mixed income of self-employed  1,500


Question 20.jpg

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Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years and a teacher from the past 18 years. He teaches Science, Economics, Accounting and English at Teachoo