Which of the following incomes will be included in India’s Gross National Product (GNP)?
Answer and explanation
Correct answer: Wages earned by an Indian normal resident working in Japan
GNP is based on the income of a country’s normal residents, regardless of whether they earn that income inside or outside the domestic territory. Thus, wages earned by an Indian normal resident while working in Japan are included in India’s GNP through factor income from abroad. Wages earned by a foreign resident in India belong to India’s GDP, while imports and transfer payments such as pensions are not included as current domestic production income in this way.
Frequently asked questions
What is the correct answer to this question?
Wages earned by an Indian normal resident working in Japan
Why is this the correct answer?
GNP is based on the income of a country’s normal residents, regardless of whether they earn that income inside or outside the domestic territory. Thus, wages earned by an Indian normal resident while working in Japan are included in India’s GNP through factor income from abroad. Wages earned by a foreign resident in India belong to India’s GDP, while imports and transfer payments such as pensions are not included as current domestic production income in this way.
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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