Statement 1: GNP at MP includes goods and services produced by all units located within the domestic territory irrespective of fact whether produced by residents or non-residents.
Statement 1: GNP at MP includes goods and services produced by all units located within the domestic territory irrespective of fact whether produced by residents or non-residents.
Statement 2: GNP at MP is always more than GDP at MP.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Anurag Pathak Changed status to publish December 7, 2023
Ans – (b)
Statement 1 is false
Reason:- GNP at MP includes goods and services produced only by residents within or outside the domestic territory of a country.
Statement 2 is false
Reason:- GNP at MP can be equal to or less than the GDP at MP. It depends on the value of NFIA. NFIA can be zero or negative too.
For Example:-
Example 1 When NFIA is Zero
GDP at MP = ₹ 300 Crores
NFIA = ₹ 0
GNP at MP = GDP at MP + NFIA
GNP at MP = ₹ 300 + ₹ 0
GNP at MP = ₹ 300 Crores
GNP at MP = GDP at MP
Example 2 When NFIA is Negative
GDP at MP = ₹ 400 Crores
NFIA = ₹ – 50 Crores
GNP at MP = GDP at MP – NFIA
GNP at MP = ₹ 400 – ₹ 50
GNP at MP = ₹ 350 Crores
GNP at MP < GDP at MP
Anurag Pathak Changed status to publish December 7, 2023
