When added net factor income from abroad to GDP we geta)Net National P...
Gross National Product
The total value of Goods and services provided by a country during one year, equal to the gross domestic product plus the net income from forigen investments.
GNP= GDP + NFIA
(where NFIA is net factor income from abroad).
When added net factor income from abroad to GDP we geta)Net National P...
Gross National Product (GNP) is a measure of the total value of all goods and services produced by the residents of a country, both domestically and abroad, during a specific period. To calculate GNP, we need to add the net factor income from abroad to the Gross Domestic Product (GDP).
Gross Domestic Product (GDP) is the total value of all final goods and services produced within the borders of a country during a specific period. It includes the value of goods and services produced by both domestic and foreign factors of production within the country.
Net factor income from abroad refers to the difference between the income earned by residents of a country from their investments and work abroad and the income earned by foreigners from their investments and work within the country.
Adding net factor income from abroad to GDP:
When we add net factor income from abroad to GDP, we are essentially accounting for income earned by the residents of a country from their investments and work abroad. This adjustment is necessary to accurately measure the total economic output of a country, as it considers the contribution of domestic factors of production outside the country's borders.
Explanation of the options:
a) Net National Product (NNP): NNP is derived by subtracting depreciation from GNP. It is not directly related to the addition of net factor income from abroad to GDP.
b) Net Domestic Product (NDP): NDP is derived by subtracting depreciation from GDP. It does not account for the income earned by residents abroad.
c) Gross National Product (GNP): GNP is the correct answer because it includes the net factor income from abroad, which accounts for the income earned by residents of a country from their investments and work abroad. By adding net factor income from abroad to GDP, we obtain GNP.
d) None: This option is incorrect because adding net factor income from abroad to GDP does result in a specific measure of economic output, which is GNP.
Therefore, the correct answer is option 'C' - Gross National Product (GNP).