Match the items is List I with those in List II.
Measure of National Income Formula
i. GNP a. GNP - Depreciation
ii. NNP b. C+I+G+Net exports
iii. GDP c. GDP - Depreciation
iv. NDP d. GDP + Net factor income from abroad
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. i-d, ii-a, iii-b, iv-c
- GNP (Gross National Product):
- Formula: GDP + Net factor income from abroad
- GNP measures the total market value of all final goods and services produced by the residents of a country in a specific period (usually a year), including net income earned from abroad (exports minus imports).
- NNP (Net National Product) equals GNP (Gross National Product) minus depreciation, reflecting the net output of goods and services available to the nation's residents after accounting for capital consumption.
- GDP (Gross Domestic Product) represents the total market value of all final goods and services produced within a country's borders during a specific period, typically a year. The formula C+I+G+Net exports breaks down GDP into its components: C (consumption), I (investment), G (government spending), and Net exports (exports minus imports), illustrating the key factors contributing to a nation's economic output.
- NDP (Net Domestic Product) is calculated by subtracting depreciation from GDP (Gross Domestic Product). Depreciation refers to the wear and tear or the decline in the value of capital goods over time. Thus, NDP represents the net output of goods and services produced within a country after accounting for the capital consumed in the production process. This measure provides a clearer picture of the economic output available for consumption and investment within the country's borders