(I) From the following, calculate the value of net domestic product at factor cost : (II) Distinguish between final goods and inter mediate goods. (I) From the following data, calculate the value of compensation of employees (COE) : (II) Distinguish between 'Fixed Investment' and 'Inventory Investment'.

Question

Accepted Answer

(I) Net Domestic Product at Factor Cost (NDP_FC) calculation:
NDP_FC = GDP_MP - Depreciation - Net Indirect Taxes
Or: NDP_FC = Compensation of Employees + Operating Surplus + Mixed Income

(II) Distinguish between final goods and intermediate goods:

Final goods: Goods used for final consumption or investment. They are not resold or used as inputs. Example: A car purchased by a consumer.

Intermediate goods: Goods used as inputs in production. They are resold or processed further. Example: Flour used by a baker.

(I) Compensation of Employees calculation:
Compensation of Employees = Wages and Salaries + Social Security Contributions + Pension contributions