Net Fixed Capital Formation
Gross Domestic Capital Formation..?
How is it used in while calculating National Income?
Gross Domestic Capital Formation (GDCF) is calculated as summation of GDFCF and Change in Stock.
Gross Domestic Capital Formation (GDCF)= Gross Domestic Fixed Capital Formation (GDFCF) + Change in Stock
If in the question, Net Domestic Fixed Capital Formation NDFCF is given, then we first estimate GDFCF by adding depreciation to NDFCF. Then, we add change in stock to get an estimate of GDCF. That is,
Gross Domestic Capital Formation (GDCF)= Net Domestic Fixed Capital Formation (NDFCF) + Depreciation + Change in Stock
However, in the question if both GDCF and NDFCF / GDFCF are given then we use only GDCF for estimating national income and ignore the sub components- NDFCF and GDFCF. In this case, no need to add depreciation to NDFCF, as it is not be included in the estimation procedure.