Question

Identify the correct equation from the following:

• A. \( GDP_{MP} = NNP_{FC} + {Depreciation} \)
• B. \( NDP_{FC} = NNP_{FC} + {Net Indirect Taxes} \)
• C. \( GNP_{MP} = GDP_{MP} + {Net Factor Income from Abroad} \)
• D. \( NNP_{FC} = NDP_{MP} + {Depreciation} \)

Hint:

Distinguish between GDP and GNP: GDP focuses on domestic production; GNP includes income from abroad.

Answer 1

The Correct Option is C

Gross National Product (GNP) at Market Price (\( GNP_{MP} \)) includes the value of goods and services produced within the country (GDP) plus the Net Factor Income from Abroad (NFIA). Hence: \[ GNP_{MP} = GDP_{MP} + NFIA \]