GDP is the most widely accepted measure of economic output, having supplanted GNP around 1990. Clearly, domestic income does not include factor income earned from abroad. Gross national product (GNP) is the value of all goods and services made by a country's residents and businesses, regardless of production location. Instead of expanding the sprawl of the city, older buildings might be torn down and replaced by new construction intended to fill the same use as the predecessor building. Net domestic product, along with GDP, Answer. Her diverse experience includes public, small business and government accounting, as well as logistics and inventory management. 2. In making the switch, the  Give reasons for each answer. The frequency and scope of such replacements can vary by type of capital assets. 24 NNP at factor cost or National Income • NNP at factor cost or national income is defined as the sum of domestic factor incomes and net factor income from abroad. Start studying National Income GDP. GNP, on the other hand, measures the output from the citizens and companies of a particular nation, regardless of whether they are located within its boundaries or overseas. The construction of new homes on previously unused real estate can also represent a gain for the net domestic product if the residences are not intended to replace defunct or demolished property. This is negative when income earned by foreigners from our country is more than the income earned by us from abroad and positive when the former is less than the latter. 25. Thus domestic income is a territorial concept since it is defined with reference to domestic territory. Many economists have questioned how meaningful GNP or GDP is as a measure of a nation's economic well-being since they do not count most unpaid work while counting economic activity that is unproductive or destructive. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. “It is the sum total of factor incomes generated by all the production units located within domestic territory of a country during an accounting year.”The point to be noted is that factor incomes should be generated within the domestic territory of a country irrespective of the fact whether producers are normal residents (citizens) or non-residents (i.e., foreigners). D) $875 billion.

Information identified as archived is provided for reference, research or recordkeeping purposes. Calculate (a) Gross National Product at Factor Cost and (b) Net National Disposable Income from the following data (Delhi 2008 c) Depreciation (or capital consumption allowance) is added to get from net domestic product to gross domestic product. Q.3. December 26, 2019 Achugatla Sanap. GNP counts the investments made by U.S. residents and businesses—both inside and outside the country—and computes the value of all products manufactured by domestic companies, regardless of where they are made. 735 crore. NDP provides an indication of the obsolescence of capital assets and how much the government has to spend to maintain economic production. The cost of services used in producing goods is not computed independently since it is included in the cost of finished products. If NNP figure is available at market price we will subtract indirect taxes and add subsidies to the figure to get NNP at factor cost or national income of the economy. Machinery that is put to regular use may need parts replaced regularly until the entire piece of equipment is no longer usable. By contrast, if a new housing community is developed, the construction of residences would be contributory to net domestic product.

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