GDP , GNP And National Income – Economics Study Notes
- National income accounting comprises of four concepts of calculations- GDP, NDP, GNP, NNP.
- Here, we discuss them and other related terms in a very objective way.
Factor cost is the input cost that producer has to incur in the process of production. It includes cost of capital – loan inetrest, prices of raw materials, labour, power, rent, etc. Can be termed as Production cost.2. Market cost is calculated after adding indirect taxes to the factor cost of the product. It is basically the cost at which the goods reach the market. Also termed as EX-FACTORY PRICE. In India we calculate income at factor cost because of non-uniform taxes.