CLEAR
Toprankers-Info

+91 7676564400

Mobile App

Get it on Google Play
Discussions
Select Date
Tags:

Articles

Discussions
Submit Discussion
Hemant Dhaware

· started a discussion

· 1 Months ago

plz explain is it GNP or GDP? (Question: 114522.0 )

plz explain is it GNP or GDP?

Question:

Gross Domestic Product (GDP) is defined as the value of all

Options:
A) Goods produced in an economy in a year
B) Goods and services in an economy in a year
C) Final goods produced in an economy in a year
D) Final goods and services produced in an economy in a year
Solution:
Ans: (d) The gross domestic product (GDP) is one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period; you can think of it as the size of the economy.

Knowledge Expert

· commented

· 1 Months ago

Dear Student,
1)GDP (Gross Domestic Product) is the money value of final goods and services produced within the domestic territory of a country during a given period of time,a quarter or a year.GDP is the output produced within the domestic territory regardless of whether it is produced by the country's factors or not.

In a closed economy,

GDP=C +I+ G

In an open economy,

GDP=C+I+G+(X-M)

2) GNP(Gross National Product) is the money value of final goods and services produced by the country's domestic factors,wherever they are located.In other words,when net factor income from abroad are added to the GDP we get GNP.

Net factor income from abroad: Some of the country's output may be produced by the factors owned by the foreigners or by the foreign owned firms.Similarly, some of the domestic factors may be producing output in a foreign country.When we make a provision of the above factors, we can get a measure of domestic output produced within the country or we can get a measure of output produced by the economy's factors of production wherever they are located. Therefore,Net Factor Income from Abroad=

R-P

Where,

R=Income received by the domestic factors for their contribution to production abroad

P=Payments made to foreign factors for their contribution to production in the domestic economy

GNP=GDP+ Net Factor Income from Abroad

Or

In an Open Economy

GNP=C+I+G+(X-M)+(R-P)

In a Closed Economy

GNP=C+I+G

When (R>P),then GNP will be greater than GDP

When(R<P),then GNP will be less than GDP.
Keep Learning with Us
Best Wishes
Team Toprankers
-logo
We at aim to provide most comprehensive content & test for practice which is carefully divided into various chapters and topics to help you focus on your weak areas.Our Practice mock test gives you unmatched analytics to help you realize your strong areas,time management and improvement areas.Our Short & Crisp notes on each topic will help you to quickly revise the topic along with the tips & tricks of the exams.
More About
-Info
-Info

Mobile App

Get it on Google Play
About Us Campus Ambassador Careers Contact Us Refund Policy

All Rights Reserved Top Rankers

User Policy
Disclaimer
Terms & Conditions