Micro and Macro short notesFORMULAS - GDP
1. NDP@ market price =GDP@ market price – CCAs (Depreciation)
2. NDP@ factor cost =GDP@ factor cost – CCAs
3. NNP@ market price =GNP@ market price – CCAs
4. NNP@ factor cost =GNP@ factor cost – CCAs
5. Per Capita NDP@ market price = NDP@ market price/Population
6. Per Capita NDP@ factor cost = NDP@ factor cost/Population
7. Per Capita NNP@ market price = NNP@ market price/Population
8. Per Capita NNP@ factor cost = NNP@ factor cost/Population
9. GDP@ market price =GDP@ factor cost – Subsidies + Indirect Taxes
10. GDP@ factor cost =GDP@ market price + Subsidies -Indirect Taxes
11. GNP@ market price =GNP@ factor cost – Subsidies + Indirect Taxes
12. GNP@ factor cost =GNP@ market price + Subsidies - Indirect Taxes
Subsidies: are government expenses that are generally extended to business firms, farmers among other groups to defray their production costs or to reduce prices for consumers. Subsidies are also called negative taxes because they impose expenses on government budgets instead of contributing revenues.
Indirect Taxes: are government revenues that result from taxes that are not received directly from the earned incomes of households, businesses etc. Thus sales taxes, highway tolls, excise taxes etc are forms of indirect taxes as opposed to direct taxes that are extracted from earned incomes.
Market prices: are the prices at which goods and services are sold in various markets to households and firms. Thus GDP@ market price for example refers to the total final output of all final goods and services produced within the national frontiers of a country by its citizens and the foreign residents who reside within those frontiers that are sold at market prices in various markets.
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