In the calculation of Gross National Product (GNP), the term ‘national’ includes production mainly on which basis?
Answer and explanation
Correct answer: Normal residence of the person or institution producing it
The national element in GNP is determined by the normal residence of the producer. Output generated by residents is counted even when it occurs abroad, while output produced domestically by non-residents is not counted in national product. Geographical location is the defining basis of GDP, not GNP.
Frequently asked questions
What is the correct answer to this question?
Normal residence of the person or institution producing it
Why is this the correct answer?
The national element in GNP is determined by the normal residence of the producer. Output generated by residents is counted even when it occurs abroad, while output produced domestically by non-residents is not counted in national product. Geographical location is the defining basis of GDP, not GNP.
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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