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Some Macroeconomic Identities
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This lesson discusses some Macroeconomic identities like GDP, NNP, GNP etc.

Arpita Prakash
YouTuber NCERTs series initiator at Unacademy 'Educator of the Month' for Feb'19 CBSE 0.1% Merit Certificate holder in Mathematics

Unacademy user
  1. Some Macroeconomic ldentities: GDP-> Gross Domestic Product - measures aggregate production of final goods and services taking place within domestic economy during a year GNP->Gross National Product GDP Net factor income from abroad o Net factor income from abroad- Factor incomes of domestic factors of production employed in rest of the world Factor income earned by factors of production of rest of the world employed in domestic economy NNP ->Net National Product- GNP- Depreciation o Depreciation-> wear and tear of capital goods, a part of which is consumed during an year Isn't part of anyone's income

  2. . All these variables are evaluated at market prices But market price includes Indirect Taxes which when imposed on goods and services results in high price To calculate that part of NNP which actually accrues to factors of production, Indirect taxes need to be deducted from NNP evaluated at market prices . Subsidies are also to be added to NNP evaluated at market prices. After this the resultant is Net National Product at factor cost (National Income) . Hence, NNP at factor cost oNational income (NI) oNNP at market prices (Indirect taxes- subsidies ) o = NNP at market prices-Net Indirect Taxes