Photo AI
Given that Gross National Product at Current Market Prices is €200m, price subsidies €5m, depreciation €12m and indirect taxes €30m - Leaving Cert Economics - Question 5(a) - 2010
Question 5(a)
Given that Gross National Product at Current Market Prices is €200m, price subsidies €5m, depreciation €12m and indirect taxes €30m. Calculate the value of each of t... show full transcript
Worked Solution & Example Answer:Given that Gross National Product at Current Market Prices is €200m, price subsidies €5m, depreciation €12m and indirect taxes €30m - Leaving Cert Economics - Question 5(a) - 2010
Step 1
Gross National Product at Factor Cost;
Answer
To calculate Gross National Product (GNP) at Factor Cost, we start from GNP at Market Prices. The formula is as follows:
GNP at Factor Cost = GNP at Market Prices + Price Subsidies - Indirect Taxes
Substituting the values:
GNP at Factor Cost = €200m + €5m - €30m
GNP at Factor Cost = €175 million.
Step 2
Net National Product at Factor Cost/National Income.
Answer
To find Net National Product (NNP) at Factor Cost, we use the following formula:
NNP at Factor Cost = GNP at Factor Cost - Depreciation
Using the value calculated previously:
NNP at Factor Cost = €175 million - €12 million
NNP at Factor Cost = €163 million.