(a) A hypothetical national income data for a country in particular year is presented below: ITEM $MILLION Wages and salaries 250 Income paid abroad 75 Inco...

Answer Details

(a) To calculate the Gross Domestic Product (GDP), we need to sum up all the domestic income earned within the country. This includes wages and salaries, income from self-employment, rent, depreciation allowance, and profits and dividends. GDP = 250 + 120 + 25 + 3 + 35 = $433 million. (b) To calculate the Gross National Product (GNP), we need to add the income received from abroad and subtract the income paid abroad from GDP. This includes income received from abroad, which is $50 million, and income paid abroad, which is $75 million. GNP = GDP + Income Received from Abroad - Income Paid Abroad = $433 + $50 - $75 = $408 million. (c) To calculate the Net National Product (NNP), we need to subtract depreciation allowance from GNP. This is because depreciation is the decrease in the value of assets used in production and it needs to be accounted for to accurately measure the country's economic output. NNP = GNP - Depreciation Allowance = $408 - $3 = $405 million. In summary, the GDP is the total income earned within the country, the GNP is the total income earned by the country's residents (including income from abroad), and the NNP is the GNP minus the depreciation allowance.