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Unformatted text preview: production. Therefore the value of indirect tax is to be deducted and that of subsidies is to be added to the estimated value of NNI at market prices in order to arrive at the factor cost value of the NNI. With these adjustments we have: NNI (MP)- IT + S = NNI (FC) , or 1530 - 460 + 120 = 1190 where IT = 460 and S = 120 In its reverse form: NNI (FC) + IT - S = NNI (MP) 1190 + 460 - 120 = 1530 In macroeconomics national income value (NI) is stated in its factor cost version. Therefore unless otherwise stated we will refer to this value as NI (that is National Income at factor cost)....
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This note was uploaded on 11/17/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.
- Fall '10
- National Income