Profit received by a foreign resident inside the country is adjusted in GNP as what?
Answer and explanation
Correct answer: Factor income paid to the rest of the world
Profit earned within the country by a foreign resident is factor income paid to the rest of the world. GDP includes production within domestic territory, but GNP adjusts it for residence by subtracting factor income paid to foreign residents and adding factor income received by domestic residents from abroad. Hence, option B is correct.
Frequently asked questions
What is the correct answer to this question?
Factor income paid to the rest of the world
Why is this the correct answer?
Profit earned within the country by a foreign resident is factor income paid to the rest of the world. GDP includes production within domestic territory, but GNP adjusts it for residence by subtracting factor income paid to foreign residents and adding factor income received by domestic residents from abroad. Hence, option B 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.
Student feedback
Was this question useful?
👍 0 Helpful 👎 0 Not helpful
Yes 0% No 0%
0 responsesWrite a review / Rate this question
Student Reviews
No published reviews yet.
