Which of the following is a component of Gross National Product? MCQ with Answer and Explanation

Which of the following is a component of Gross National Product?
A. GDP plus net factor income from abroad
B. GDP minus net factor income from abroad
C. NDP plus depreciation
D. GDP minus depreciation
Answer: Option A
Solution (By JKSSB Mock Tests)
GNP = GDP + Net factor income from abroad. Net factor income from abroad is the difference between factor income received from abroad and factor income paid to abroad.

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Practice More Economy Set 1 Questions

Question #1
The 'base effect' in inflation refers to:
A. the effect of exchange rate on imports
B. the effect of changing the base year of GDP
C. the effect of money supply on prices
D. inflation measured against a low or high price level in the previous year

Correct Answer: Option D


Explanation:
Base effect refers to the influence of the previous year's price level on the current inflation rate.

This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a major reason for the growth of the service sector in India?
A. Decline in demand for services
B. Liberalisation, IT revolution and rising incomes
C. Complete absence of industrial growth
D. Only agricultural growth

Correct Answer: Option B


Explanation:
The service sector in India has grown rapidly due to economic liberalisation, the information technology revolution, rising incomes and global demand for services such as software and BPO.

This question belongs to: Economy GK Economy Set 1
Question #3
An expansionary fiscal policy consists of:
A. increasing taxes and reducing government expenditure
B. reducing money supply
C. reducing taxes or increasing government expenditure
D. raising the repo rate

Correct Answer: Option C


Explanation:
Expansionary fiscal policy increases aggregate demand through lower taxes or higher government expenditure.

This question belongs to: Economy GK Economy Set 1