Wednesday, April 8, 2020

Calculation of Expenditure method

Date : 9.4.2020
Sub  : Economics
Class : 12
Day   : 1
Period : 7
Time    : 12:20pm- 1pm

Learning Outcomes

  • To understand how National Income is calculated through the Expenditure  method
  • Meaning of the terms related to National Income
  • Understanding the various components of the Expenditure
  • Significance of Expenditure method in calculating National Income
A very good morning students
Today we are going to learn the computation of National Income through the Expenditure Method.
There are 4 components of the Expenditure method

  • Private Final Consumption Expenditure
  • Government Final Consumotion Expenditure
  • Gross domestic Capital Formation
  • Net Exports also called (X-M)
If we add the above 4 components we will arrive at Gross Domestic Product at Market Price (GDPmp)
Converting Gross to Net substract Depreciation from Gross we will get Net
GDPmp- Depreciation = Net domestic Product at Market Price (NDPmp)

Converting  Market Price to Factor Cost substract Net Indirect Tax from NDPmp and we will arrive at NDPfc which is Domestic Income
NDPmp - Net Indirect Tax = NDPfc

Converting Domestic Income to National Income add Net Factor Income From Abroad 
NDPfc + NFIA = NNPfc which is National Income

Please go through the video it has been explained very well



Try and solve the sum by yoursef




23 comments:

  1. Good morning sir
    Armaan Oberoi 12-B

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  2. Good afternoon sir
    Shashwat singh 12 B

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  3. Good afternoon sir.
    Swaraj Swarup Aggarwal,
    XII-B.

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  4. Good afternoon sir. Keshav khurana 12-B

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  5. Good morning Sir
    Siddhant 12 B

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  6. Good morning Sir .This is Nakul Kapur from class 12-B.

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  7. Good morning sir
    Utkarsh Heer 12-B

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  8. Good morning sir dominic Gomes 12B

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  9. Good afternoon sir John Pius XII B

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  10. Good Morning Sir
    Swayam Khandelwal 12-B

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  11. Good afternoon sir
    Akhil Sharma 12-B

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  12. Good afternoon sir
    Shashwat Jain 12-B

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  13. Good afternoon sir
    Harshil Arora
    12-B

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  14. Good afternoon sir Anmol Gupta 12 B

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