Distinguish between:
National income at market prices and national income at factor cost
Basis
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National income at market price (NNPMP)
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National income at factor cost (NNPFC)
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1. Definition
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It refers to the total market value of all final goods and services produced by the normal residents of a country both within the domestic territory as well as outside the country.
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It refers to the aggregate of all factor incomes earned by those factors of production that are normal residents of a country both within the domestic territory as well as abroad.
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2. Indirect taxes and subsidies
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It takes into account the impact of indirect taxes and subsidies.
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It does not take into consideration the impact of subsidies and indirect taxes.
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