alleryStart learning →Gross National Product at market prices equals GDP at market prices plus:
ADepreciation allowance
BNet factor income from abroad
CIndirect taxes that are paid
DUndistributed corporate profit
Answer & Solution
Correct answer: B. Net factor income from abroad
1. GDP measures the total market value of final goods and services produced within the country during a year.
2. GNP is the corresponding measure that also includes net income from abroad.
3. The textbook's formula is therefore GNP at market prices equals GDP at market prices plus net factor income from abroad.
4. Depreciation is what separates gross from net measures, a different axis altogether, so option A confuses the two distinctions.
_Source: TN HSC Class 12 Economics (Samacheer Kalvi, Govt of Tamil Nadu), Ch 2 "National Income", §2.4.2_
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