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Indian economy miscellaneous

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Indian economy miscellaneous
  1. A firm sells new shares worth Rs. 1000 directly to individuals. This trans-action will cause.
    1. Gross National product to rise by Rs. 1000
    2. Gross Domestic Product to rise by Rs. 1000
    3. National Income to rise by Rs. 1000
    4. No impact on Gross National Product
Correct Option: D

Gross National Product (GNP) is the market value of all products and services produced in one year by labor and property supplied by the residents of a country. Unlike Gross Domestic Product (GDP), which defines production based on the geographical location of production, GNP allocates production based on ownership. Therefore if the firm sells new shares directly to individuals it has no effect on the Gross National product as there is no direct relation between two.


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