100 only. Thus, from the money value of NNP at market price or NNI we deduct the amount of indirect taxes to arrive at the net national income at factor cost.NNP at MP – Indirect Taxes = Net National Income at Factor Cost.On the other hand, a subsidy causes the market price to be less than the factor cost. NNI at Factor Cost = NNI at MP plus Subsidies minus Indirect Taxes.Sometimes Governments render productive services and earn profits— these profits or surplus earned by the Governments must be deducted before we can find out Net National Income at Factor Cost because these profits do not go to factors of production in the form of incomes but are deposited in the government treasury and, therefore, must be deducted.NNI at Factor Cost – NNI at MP plus Subsidies minus Indirect Taxes and Government earned profits.Welcome to EconomicsDiscussion.net! 25 on this output so that it is sold in the market for Rs. Thus, while the consumer pays 90 paise per yard, the factors of production will receive Re. are called 2. For the owners of the factor of production who receives such payments, it is ‘factor income’.Compensation of employees: all monetary and non monetary benefits that accrue to the employees on account of work performed.Operating surplus = Property income (rent & interest) + Entrepreneurial Income (profit).Purchases for final consumption are made by the households and general government.Purchases for investment are made by the production unit within the economic territory and by foreigners.1) on fixed assets like building, machines, furnitures, etc. Hence, net national income at factor cost shows the income actually received by the factors of production. Let us presume that the actual cost of producing a certain output is Rs. 3. It includes income of Indian citizens whether living in or outside India. The phrase at factor cost is to be contrasted with the phrase at market prices.Goods produced are sold at market prices which include the indirect taxes imposed by the Government. Net National Product at factor cost is called the National Income of a country. The money value of cloth at factor cost would be equal to its market price plus the subsidies paid on it..’. This will include all the Indian embassies and similar offices located in foreign countries.2) Exclude all the foreign embassies, offices of International organization and similar offices of a country located within the geographical territory of the country. Net National Product (NNP), Net National Income (NNI) and Per-Capita Income (PCI). It is represented as follows: NNP= NDP + NFIA Or NNP=GDP-Depreciation + NFIA As in the case of Gross National Product, the NNP may be more or less than NDP , depending upon the positive or negative value of the NFIA. and are called Gross Domestic Fixed Capital Formation (GDFCF).2) on stocking of raw materials, semi-finished goods and finished goods and are called net addition to stock.GDFC is gross because the consumption of fixed capital not been deducted from it.Thus NDFC is a measure of the net domestic investment during the year.In National Income accounting any part of the final products produced during the year but not consumed within the economic territory of the country is treated as Investment.Sum total of PFCE, GFCE, GDCF and Net Exports is a measure of the Total final expenditure of a country during a given year.Looking to earn some money? Net national income is defined as gross domestic product plus net receipts of wages , salaries and property income from abroad, minus the depreciation of fixed capital assets (dwellings, buildings, machinery, transport equipment and physical infrastructure) through wear and tear and obsolescence.
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