DATE :- 07 TH NOVEMBER,2022

XII MACRO ECONOMICS REVISION OF VALUE ADDED / NET

OUTPUT/INDUSTRIAL METHOD FORMULAES

1. CALCULATION OF GROSS VALUE OF OUTPUT AT MARKET PRICE (GVO MP) = PRICE ×

QUANTITY (P × Q)

CALCULATION OF GVO MP =MSALES + CHANGE IN STOCKS (Δ STOCKS = CLOSING STOCK –

OPENING STOCK )

2. CALCULATION OF NET VALUE ADDED AT FACTOR COST (NVA FC) = GROSS VALUE ADDED AT
MARKET PRICE --- (MINUS) DEPRICIATION --- (MINUS) NET INDIRECT TAXES (NIT = INDIRECT
TAXES --- SUBSIDIES) (DEPRECIATION IS ALSO CALLED CONSUMPTION ON FIXED CAPITAL
(CFC) OR CAPITAL CONSUMPTION ALLOWANCE (CCA)

GROSS VALUE ADDED AT MARKET PRICE (GVA MP) IS ALSO TERMED AS GROSS DOMESTIC
PRODUCT AT MARKET PRICE (GDP MP)

3. CALCULATION OF GROSS VALUE OF OUTPUT AT MARKET PRICE (GVO MP) = SALES + (Δ

STOCKS = CLOSING STOCK – OPENING STOCK ) + GOODS PURCHASED FOR SELF
CONSUMPTION (IF GIVEN)

ALTERNATIVE FORMULA :- CALCULATION OF GVA MP / GDP MP = GVO MP --- (MINUS)

INTERMEDIATE CONSUMPTION (IC)

IC INCLUDES DOMESTIC PURCHASES + IMPORTS FROM OTHER FIRMS/SELLERS/COUNTRIES

5. CALCULATION OF NET DOMESTIC PRODUCT AT FACTOR COST / DOMESTIC FACTOR INCOME

= GROSS DOMESTIC PRODUCT AT MARKET PRICE (GDP MP) --- DEPRICIATION – NET INDIRECT
TAXES

6. CALCULATION OF NATIONAL INCOME (NNP AT FACTOR COST) = NDP FC + NET FACTOR

INCOME FROM ABROAD

What is FIFA and FITA?

FIFA= Factor Income (income received/paid after doing/receiving any productive
activity) earned from rest of the world. 
FITA= Factor income paid to rest of the world. NFIA = FY RECEIVED
FROM ABROAD/FIFA --- FITA)

7. CALCULATION OF GDP MP = GVO MP --- IC

8. CALCULATION OF GDP FC/ GVA FC = GDP MP --- NET INDIRECT TAXES(NIT)

9. CALCULATION OF NET DOMESTIC PRODUCT AT MARKET PRICE (NDP MP)
OR NET VALUE ADDED AT MARKET PRICE (NVA MP) = GROSS DOMESTIC
PRODUCT AT MARKET PRICE (GDP MP ) --- (MINUS) DEPRICIATION

10. DEAR STUDENTS FOR YOUR REMEMBERANCE GDP MP = GVA MP