If GDP at market price (GDP_MP) is 4100 and net factor income from abroad (NFIA) is -250, what is GNP at market price (GNP_MP)?
Answer and explanation
Correct answer: 3850
GNP at market price is calculated by adding net factor income from abroad to GDP at market price: GNP_MP = GDP_MP + NFIA. Therefore, GNP_MP = 4100 + (-250) = 3850. The negative NFIA reduces GNP because residents’ factor payments to foreigners exceed factor income received from abroad. Hence, option A, 3850, is correct.
Frequently asked questions
What is the correct answer to this question?
3850
Why is this the correct answer?
GNP at market price is calculated by adding net factor income from abroad to GDP at market price: GNP_MP = GDP_MP + NFIA. Therefore, GNP_MP = 4100 + (-250) = 3850. The negative NFIA reduces GNP because residents’ factor payments to foreigners exceed factor income received from abroad. Hence, option A, 3850, is correct.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - GNP.
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