Q. Consider the following statements:

1. GNP = GDP + Net factor income from abroad
2. Net National Product at factor cost is “National Income”
3. National Disposable Income = Net National product at market prices + other current transfers from the rest of the world.

Which of the above is / are correct?
Answer: All of the above
Notes: All statements are correct. The macroeconomic variable which takes into account such additions and subtractions is known as Gross National Product (GNP). Therefore, the definition is follows GNP/GDP + Factor income earned by the domestic factors of production employed in the rest of the world - Factor income earned by the factors of production of the rest of the world employed in the domestic economy. If we deduct depreciation from GNP the measure of aggregate income that we obtain is called Net National Product (NNP). Thus, NNP { GNP - Depreciation. It is to be noted that all these variables are evaluated at market prices.

This question is part of UPSC Daily 20 MCQ Series Course on GKToday Android app.