Identify the correct interpretation of Gross National Product (GNP).
Show answer & explanation
Correct answer: B
Explanation
Answer: Income earned by Indians at home and abroad
Explanation: Gross National Product (GNP) measures the total value of all final goods and services produced by the residents (nationals) of a country, whether within the domestic territory or outside the country. It includes income earned by Indians abroad but excludes income earned by foreigners within India.
Additional Key Points:
GNP = GDP + Net Factor Income from Abroad (NFIA).
GDP considers production within a country’s borders.
GNP focuses on nationality (citizenship of producers).
It is an important indicator of a country’s economic strength.
Potential Exam-Oriented Questions & Answers:
Question: How is GNP different from GDP?
Answer: GNP includes income from abroad, while GDP is domestic output only
Question: What is the formula of GNP?
Answer: GNP = GDP + Net Factor Income from Abroad