Question

Estimate the Gross National Product at market price and GNP at factor cost through the expenditure method.

Item	Amount (in Crores)
Inventory investment	15
Net factor income from abroad	10
Personal consumption expenditure	475
Gross residential construction investment	48
Exports	25
Government purchase of goods and services	175
Gross business fixed investment	38
Imports	12
Net indirect tax	8

Answer 1

GNP_MP = private consumption expenditure + govt, final consumption expenditure( gross fixed capital formation + change in stock or inventory investment) + net export + net factor income from abroad

= 475 + 175 + 101 (i.e., 48 + 15+ 38) + 15 + 13

= ₹779 crores.

GN_PC = GNPUD – net indirect taxes 

= 779 – 8 = ₹771 crores