Which statement correctly describes Gross National Product (GNP) at market prices?
Answer and explanation
Correct answer: It is the value of final goods and services produced by normal residents within the country and abroad, without deducting depreciation.
GNP at market prices measures the market value of final goods and services produced by a country’s normal residents, whether production occurs inside the country or abroad. The word “gross” means that depreciation is not deducted. Therefore, GNP = GDP + net factor income from abroad (NFIA). Option A describes a domestic-territory idea, option C describes GDP, and option D describes a net rather than gross measure.
Frequently asked questions
What is the correct answer to this question?
It is the value of final goods and services produced by normal residents within the country and abroad, without deducting depreciation.
Why is this the correct answer?
GNP at market prices measures the market value of final goods and services produced by a country’s normal residents, whether production occurs inside the country or abroad. The word “gross” means that depreciation is not deducted. Therefore, GNP = GDP + net factor income from abroad (NFIA). Option A describes a domestic-territory idea, option C describes GDP, and option D describes a net rather than gross measure.
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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