Which of the following items is included in Gross National Product (GNP)?
Answer and explanation
Correct answer: Factor income earned abroad by the country's normal residents
GNP measures the value of final goods and services produced by a country's normal residents, regardless of whether production occurs inside the country or abroad. Hence, factor income earned abroad by normal residents is included in national product. Income earned domestically by foreigners belongs to domestic product, while resale transactions and unpaid household services are generally excluded from measured GNP.
Frequently asked questions
What is the correct answer to this question?
Factor income earned abroad by the country's normal residents
Why is this the correct answer?
GNP measures the value of final goods and services produced by a country's normal residents, regardless of whether production occurs inside the country or abroad. Hence, factor income earned abroad by normal residents is included in national product. Income earned domestically by foreigners belongs to domestic product, while resale transactions and unpaid household services are generally excluded from measured 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.
