**
As per this Method
**

We calculate total final expenditure of different sectors of economy

We reduce Depreciation and Net Indirect taxes to arrive at NDP at FC

We add Net Factor Income from abroad to get National income

Steps followed

**
Step 1
**

Identify Different Sectors of economy and calculate their Final Expenditure

**
Step 2
**

Calculate Total Expenditure of all Sectors to arrive at GDP at MP

**
Step 3
**

We reduce Depreciation and Net Indirect taxes to arrive at NDP at FC (Domestic Income)

**
Step 4
**

We add NFIA to get National Income

**
Example 27
**

Calculate GDP at MP

**
Step 1
**

We calculate Gross Domestic Capital Formation

* Gross Domestic Capital Formation

=Expenditure on Fixed Assets +Expenditure on Stock

=Gross Fixed Capital formation + Inventory Investment

300 + 400 = 700

**
Step 2
**

We calculate Net Exports

Net Exports

=Exports -Imports

600-500 =100

**
Step 3
**

We calculate GDP Mp

**
Question 29
**

Calculate National Income.

#### Note

Consumption of Fixed Capital is the other name of Depreciation

Depreciation =Consumption of Fixed Capital = 700

**
Question 30
**

Calculate National Income from the following data:

#### Note

Here, we are given Net Imports instead of Net Exports

Net Imports =30

So Net Export = - 30

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