If GNP at market price is ₹1,300 crore and net factor income from abroad is ₹90 crore, what is GDP at market price?
Answer and explanation
Correct answer: ₹1,210 crore
The relationship between the two aggregates is GNP at market price = GDP at market price + net factor income from abroad. Therefore, when GDP is required, net factor income from abroad must be subtracted from GNP: GDPMP = ₹1,300 crore − ₹90 crore = ₹1,210 crore. Adding ₹90 crore would incorrectly move from GDP to GNP rather than from GNP to GDP.
Frequently asked questions
What is the correct answer to this question?
₹1,210 crore
Why is this the correct answer?
The relationship between the two aggregates is GNP at market price = GDP at market price + net factor income from abroad. Therefore, when GDP is required, net factor income from abroad must be subtracted from GNP: GDPMP = ₹1,300 crore − ₹90 crore = ₹1,210 crore. Adding ₹90 crore would incorrectly move from GDP to GNP rather than from GNP to GDP.
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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