Which statement correctly describes Gross National Product (GNP)?
Answer and explanation
Correct answer: It is the gross value of final goods and services produced by normal residents within the domestic territory and abroad.
GNP measures the gross value of final goods and services produced by a country’s normal residents, whether production takes place inside the domestic territory or abroad. Thus, GNP = GDP + NFIA. Option B describes GDP, option C describes a net concept, and option D incorrectly includes intermediate goods.
Frequently asked questions
What is the correct answer to this question?
It is the gross value of final goods and services produced by normal residents within the domestic territory and abroad.
Why is this the correct answer?
GNP measures the gross value of final goods and services produced by a country’s normal residents, whether production takes place inside the domestic territory or abroad. Thus, GNP = GDP + NFIA. Option B describes GDP, option C describes a net concept, and option D incorrectly includes intermediate goods.
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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