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Which one of the following statement is true?
- a)GDP is always greater then GNP
- b)GDP is always lower than GNP
- c)GDP is equal to GNP when “income from Abroad” is zero
- d)GDP is equal to GNP when “depreciation” is zero
Correct answer is option 'C'. Can you explain this answer?
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Which one of the following statement is true?a)GDP is always greater t...
Gross National Product (GNP) is the GDP of a country added with its ‘income from abroad’. Theitems which are counted in the segment ‘Income from Abroad’ are:
1. Trade Balance: the net outcome at the year end of the total exports and imports of acountry may be positive or negative accordingly added with the GDP.
2. Interest of External Loans: the net outcome on the front of the interest payments i.e.balance of the inflow (on the money lend out by the economy) and the outflow (on themoney borrowed by the economy) of the external interests.
3. Private Remittances: the net outcome of the money which inflows and outflows onaccount of the ‘private transfers’.
The balance of all the three components of the ‘Income from Abroad’ segment may turn out tobe positive or negative. Thus relationship between GDP and GNP depends on the net value ofincome from abroad. When the income from abroad is zero GDP is equal to GNP.
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Which one of the following statement is true?a)GDP is always greater t...
Explanation:
GDP (Gross Domestic Product) and GNP (Gross National Product) are both measures of the economic output of a country. The main difference between the two is that GDP measures the value of all goods and services produced within a country's borders, regardless of the nationality of the producers, while GNP measures the value of all goods and services produced by the residents of a country, regardless of where they are located.
Among the given options, the correct statement is option C: GDP is equal to GNP when income from abroad is zero.
Here is a detailed explanation of why this statement is true:
1. Definition of GDP:
GDP represents the total value of all goods and services produced within a country's borders during a specific period, typically a year. It includes the output of both domestic and foreign-owned firms operating within the country.
2. Definition of GNP:
GNP represents the total value of all goods and services produced by the residents of a country, regardless of their location. It includes the output of domestic firms operating abroad and excludes the output of foreign firms operating within the country.
3. Income from Abroad:
When residents of a country earn income from abroad, it is added to GNP. This includes income earned by citizens working in foreign countries, as well as income earned by domestic firms operating abroad.
4. Income to Abroad:
Similarly, when foreign residents earn income within a country's borders, it is deducted from GNP. This includes income earned by foreign workers within the country, as well as income earned by foreign-owned firms operating within the country.
5. Net Income from Abroad:
The difference between income from abroad and income to abroad is known as Net Income from Abroad. If net income from abroad is positive (income from abroad is greater than income to abroad), then GNP will be greater than GDP. Conversely, if net income from abroad is negative (income to abroad is greater than income from abroad), then GNP will be lower than GDP.
6. When income from abroad is zero:
If there is no income from abroad, it means that the income earned by residents of the country abroad is equal to the income earned by foreign residents within the country. In this case, net income from abroad is zero, and as a result, GNP will be equal to GDP.
Therefore, the correct statement is that GDP is equal to GNP when income from abroad is zero (option C).
GDP (Gross Domestic Product) and GNP (Gross National Product) are both measures of the economic output of a country. The main difference between the two is that GDP measures the value of all goods and services produced within a country's borders, regardless of the nationality of the producers, while GNP measures the value of all goods and services produced by the residents of a country, regardless of where they are located.
Among the given options, the correct statement is option C: GDP is equal to GNP when income from abroad is zero.
Here is a detailed explanation of why this statement is true:
1. Definition of GDP:
GDP represents the total value of all goods and services produced within a country's borders during a specific period, typically a year. It includes the output of both domestic and foreign-owned firms operating within the country.
2. Definition of GNP:
GNP represents the total value of all goods and services produced by the residents of a country, regardless of their location. It includes the output of domestic firms operating abroad and excludes the output of foreign firms operating within the country.
3. Income from Abroad:
When residents of a country earn income from abroad, it is added to GNP. This includes income earned by citizens working in foreign countries, as well as income earned by domestic firms operating abroad.
4. Income to Abroad:
Similarly, when foreign residents earn income within a country's borders, it is deducted from GNP. This includes income earned by foreign workers within the country, as well as income earned by foreign-owned firms operating within the country.
5. Net Income from Abroad:
The difference between income from abroad and income to abroad is known as Net Income from Abroad. If net income from abroad is positive (income from abroad is greater than income to abroad), then GNP will be greater than GDP. Conversely, if net income from abroad is negative (income to abroad is greater than income from abroad), then GNP will be lower than GDP.
6. When income from abroad is zero:
If there is no income from abroad, it means that the income earned by residents of the country abroad is equal to the income earned by foreign residents within the country. In this case, net income from abroad is zero, and as a result, GNP will be equal to GDP.
Therefore, the correct statement is that GDP is equal to GNP when income from abroad is zero (option C).
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Which one of the following statement is true?a)GDP is always greater then GNPb)GDP is always lower than GNPc)GDP is equal to GNP when “income from Abroad” is zerod)GDP is equal to GNP when “depreciation” is zeroCorrect answer is option 'C'. Can you explain this answer?
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Which one of the following statement is true?a)GDP is always greater then GNPb)GDP is always lower than GNPc)GDP is equal to GNP when “income from Abroad” is zerod)GDP is equal to GNP when “depreciation” is zeroCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which one of the following statement is true?a)GDP is always greater then GNPb)GDP is always lower than GNPc)GDP is equal to GNP when “income from Abroad” is zerod)GDP is equal to GNP when “depreciation” is zeroCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which one of the following statement is true?a)GDP is always greater then GNPb)GDP is always lower than GNPc)GDP is equal to GNP when “income from Abroad” is zerod)GDP is equal to GNP when “depreciation” is zeroCorrect answer is option 'C'. Can you explain this answer?.
Which one of the following statement is true?a)GDP is always greater then GNPb)GDP is always lower than GNPc)GDP is equal to GNP when “income from Abroad” is zerod)GDP is equal to GNP when “depreciation” is zeroCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which one of the following statement is true?a)GDP is always greater then GNPb)GDP is always lower than GNPc)GDP is equal to GNP when “income from Abroad” is zerod)GDP is equal to GNP when “depreciation” is zeroCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which one of the following statement is true?a)GDP is always greater then GNPb)GDP is always lower than GNPc)GDP is equal to GNP when “income from Abroad” is zerod)GDP is equal to GNP when “depreciation” is zeroCorrect answer is option 'C'. Can you explain this answer?.
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