Calculate Gross Income From Net Income
Question: How would you calculate the GNP, NNP and national income from the following..?
How would you calculate these:
(A)Gross national product (GNP) at market prices (taking GDP by its output measure);
(B)Net national product (NNP) at market prices;
(C)National income (NNP at basic prices).From this information:
Government consumption expenditure (individual and collective): 286,812;
Gross capital formation (incl. changes in inventories): 238,531;
Fixed capital consumption: 133,936;
Exports of goods and services: 369,691;
Imports of goods and services: 424,128;
Net factor income from the ‘rest of the world’ [ROW] (net of indirect taxes paid to plus subsidies received from ROW): 17,334;
Indirect taxes on domestic products and imports minus subsidies (including taxes paid to and subsidies received from ROW): 144,663.
The figures also indicate a statistical discrepancy between output measure of GDP and expenditures approach of £m 635.
Answer: Private Consumption Expenditure should usually be given too…
GDP= (C+G)+I+Ex-Im +Stat= 286’812+238’531+ 369’691-424’128+635= 471’541
You can’t calculate Gross/Net national products without knowing RoW taxes payed and subsidies from RoW.
But it’s possible to calculate Gross national income:
GNI=GDP + Net Factor Income From RoW + NetSubsTaxRoW = 471’541+17’334 = 488’875
And Net National Income:
NNI = GNI – Depreciation = 488’875 – 133’936 = 354’939
You can’t calculate net national product or income at basic prices without having initial basic prices data or without relevant price indexes.
NPP’S 7.3% Economic Growth Is Misleading And Sakawa!!
It was all joy when the government statistician made the announcement of an all time high economic growth which turned out to be one of the NPP’s 419. It is recalled that on the 29th April 2009, Dr. Grace Bediako the government statistician at a press conference announced the 2008 economic growth using the expenditure approach and 1993 as the based year.
Analyzing the Income Statement
