Quantity of tea produced=2000 , price of tea per kg =100 quantity of c...
Understanding GNPmp and GNPfc
Gross National Product (GNP) can be calculated using two approaches: GNP at market prices (GNPmp) and GNP at factor cost (GNPfc).
Calculating GNPmp
To find GNPmp, we sum the total output produced in the economy, including the value of all goods and services.
- Value of tea produced: 2000 kg * 100 = 200,000
- Value of coffee produced: 1500 kg * 300 = 450,000
- Value of other agricultural products = 600,000
- Value of industrial products = 800,000
Now, we can calculate the sum:
- Total Output = Value of tea + Value of coffee + Value of other agricultural products + Value of industrial products
- Total Output = 200,000 + 450,000 + 600,000 + 800,000 = 2,050,000
Next, we subtract the value of intermediate inputs to find GNPmp:
- GNPmp = Total Output - Intermediate Inputs
- GNPmp = 2,050,000 - 300,000 = 1,750,000
Calculating GNPfc
To calculate GNPfc, we need to adjust GNPmp by adding depreciation and subtracting net factor income to abroad:
- GNPfc = GNPmp + Depreciation - Net Factor Income to Abroad
- GNPfc = 1,750,000 + 20,000 - 50,000
- GNPfc = 1,750,000 - 30,000 = 1,720,000
Summary of Results
- GNPmp = 1,750,000
- GNPfc = 1,720,000
These calculations provide a clear picture of the national income from both the market price and factor cost perspectives.