Question

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Consider the following statements with reference to Gross National Product:

1. It is the total value of all finished goods and services produced by a country's citizens in a given financial year.
2. Income from overseas investments by a citizen of a country is not considered while calculating GNP.

Which of the above is/are true

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. None of the Above

Answer 1

The correct option is A 1 only

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> The formula for GNP = GDP + Net factor income from abroad
GNP = C + I + G + X + Z
Where C is Consumption, I is investment, G is government, X is net exports, and Z is net income earned by domestic residents from overseas investments minus net income earned by foreign residents from domestic investments.