(a) On the basis of the following hypothetical data, calculate the percentage change in Real Gross Domestic Product (GDP) in the year 2022 – 23,…

Percentage change in Real Gross Domestic Product (GDP) in the year $\displaystyle 2022$-$\displaystyle 23$

$\displaystyle = \dfrac{\text{Change in Real GDP}}{\text{Real GDP}} \times 100$

$\displaystyle = \dfrac{6000 - 5000}{5000} \times 100$

$\displaystyle = 20\%$

Steps pertaining to the estimation of National Income under the Expenditure method are:

1. Identify and classify all the economic units incurring final expenditure as Households, Firms, Government and rest of the world.

2. Estimate and classify the final expenditure incurred by the economic units as Private Final Consumption Expenditure (PFCE), Government Final Consumption Expenditure (GFCE), Gross Domestic Capital Formation (GDCF) and Net Exports (X-M). The sum total of four components of final expenditure represents Gross Domestic Product at Market Price ($\displaystyle \text{GDP}_{MP}$).

3. Finally, estimate and subtract the value of Depreciation and Net Indirect Taxes and add the value of Net Factor Income from Abroad (NFIA) to arrive at National Income ($\displaystyle \text{NNP}_{FC}$).