Macroeconomics: National Income Accounting · Class 12 · CBSE · Commerce Economics
In an economy, net factor income from abroad is positive. Compared with GDP, which statement is necessarily true, assuming both are measured at the s…
Practice question from Macroeconomics: National Income Accounting (Class 12 · CBSE · Commerce Economics), with the correct answer and a step-by-step solution.
easy · MCQ · Q-97BBAD
In an economy, net factor income from abroad is positive. Compared with GDP, which statement is necessarily true, assuming both are measured at the same price basis?
- A.GNP exceeds GDP by the amount of net factor income from abroad.Correct answer
- B.GDP exceeds GNP by the amount of net factor income from abroad.
- C.GNP and GDP must be equal.
- D.The relationship cannot be determined even when net factor income from abroad is known.
Solution
GNP is obtained by adding net factor income from abroad to GDP. Therefore, when net factor income from abroad is positive, GNP exceeds GDP by that amount.
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