Question

    Calculate the GDP at Market Price from the following

    data (in ₹ Crores): Private Final Consumption Expenditure: 8,000 Government Final Consumption Expenditure: 2,000 Gross Fixed Capital Formation: 3,000 Change in Stocks: 500 Net Exports (Exports - Imports): (-200) Depreciation: 700 Net Indirect Taxes: 1,000
    A ₹13,300 Correct Answer Incorrect Answer
    B ₹14,000 Correct Answer Incorrect Answer
    C ₹13,000 Correct Answer Incorrect Answer
    D ₹12,300 Correct Answer Incorrect Answer
    E ₹12,500 Correct Answer Incorrect Answer

    Solution

    • GDP at Market Price (GDPmp) is calculated using the  Expenditure Method :
      GDPmp = Private Final Consumption Expenditure (C) + Government Final Consumption Expenditure (G) + Gross Fixed Capital Formation (I) + Change in Stocks ( Δ S) + Net Exports (X - M)
      Plugging in the values:
      GDPmp = 8,000 (C) + 2,000 (G) + 3,000 (I) + 500 ( Δ S) + (-200) (NX)
      GDPmp = 8,000 + 2,000 + 3,000 + 500 - 200
      GDPmp =  ₹13,300 Crores
      Note: Depreciation and Net Indirect Taxes are not used directly in this calculation. Depreciation is used to get from Gross to Net Domestic Product. Net Indirect Taxes are used to get from Market Price to Factor Cost.

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