Question

Zambian economy is hypothetically presented by the following information
Subside k20000
Exports k250000
Government purchase k400000
Net property from abroad k10000
Imports k530000
Depreciation k380000
Indirect taxes k300000
Consumption k970000
Investment k130000
You are required to calculate the following?
1.GDP at market price
2.GDP at factor cost
3.GNP at market price
4.GNP at factor cost
5.NNP at market price

Answer 1

1. GDP at market price = Consumption + Government purchase + Investment + Exports - Imports
GDP at market price = 970000 + 400000 + 130000 + 250000 - 530000
GDP at market price = 122000

2. GDP at factor cost = GDP at market price - Indirect taxes + Subsidies
GDP at factor cost = 122000 - 300000 + 20000
GDP at factor cost = -178000

3. GNP at market price = GDP at market price + Net property from abroad
GNP at market price = 122000 + 10000
GNP at market price = 132000

4. GNP at factor cost = GDP at factor cost + Net property from abroad
GNP at factor cost = -178000 + 10000
GNP at factor cost = -168000

5. NNP at market price = GNP at market price - Depreciation
NNP at market price = 132000 - 380000
NNP at market price = -248000