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If GDP is ₹10,000 crore, factor income from abroad is ₹600 crore, and factor income paid abroad is ₹750 crore, what will be GNP?

Answer and explanation

Correct answer: ₹9,850 crore

First calculate net factor income from abroad: NFIA = factor income from abroad − factor income paid abroad = ₹600 crore − ₹750 crore = −₹150 crore. Then apply GNP = GDP + NFIA. Thus, GNP = ₹10,000 crore − ₹150 crore = ₹9,850 crore. The negative NFIA occurs because payments to foreign factors exceed receipts from Indian factors abroad.

Related tags

GnpGdpNfiaFactor IncomeNumericalGdp And WelfareNational Income And Related AggregatesEconomics

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