Table of Contents
- 1 What is the difference between net domestic product and net national product?
- 2 What are the impacts of the shortcomings of the GDP as a measure of the national product and national economic welfare well-being )?
- 3 How do we get the gross domestic product of a country?
- 4 What is net domestic product in economics?
- 5 Why is household production not included in GDP?
- 6 Why is residential construction considered an investment rather than consumption multiple choice question?
- 7 How does gross domestic product differ from gross national product?
- 8 What happens when domestic and foreign rates of return converge?
- 9 What happens to rates of return when the dollar depreciates?
What is the difference between net domestic product and net national product?
Distinguish between: Net national product and Net domestic product….Solution.
| Basis | Net National Product (NNP) | Net Domestic Product (NDP) |
|---|---|---|
| 2. Net factor Income from abroad | It includes the net factor income from abroad. | It excludes the net factor income from abroad. |
What are the impacts of the shortcomings of the GDP as a measure of the national product and national economic welfare well-being )?
GDP is a useful indicator of a nation’s economic performance, and it is the most commonly used measure of well-being. However, it has some important limitations, including: The exclusion of non-market transactions. The failure to account for or represent the degree of income inequality in society.
How do we get the gross domestic product of a country?
The GDP calculation accounts for spending on both exports and imports. Thus, a country’s GDP is the total of consumer spending (C) plus business investment (I) and government spending (G), plus net exports, which is total exports minus total imports (X – M).
Do foreign citizens contribute to GDP?
Goods and services produced outside a nation’s boundaries by the nation’s own citizens and firms are included in GNP but are excluded from GDP. Goods and services produced within a nation’s boundaries by foreign citizens and firms are excluded from GNP but are included in GDP.
What do you mean by domestic territory of a country?
Domestic territory: In common language, the domestic territory of a nation means political territory of a nation. In economics, it refers to economic territory which refers to the geographical territory administered by a government within which persons, goods and capital circulate freely.
What is net domestic product in economics?
Net domestic product (NDP) is an annual measure of the economic output of a nation that is calculated by subtracting depreciation from gross domestic product (GDP).
Why is household production not included in GDP?
GDP measures the value of goods and services that are bought in markets, so it excludes: Household Production : Household production is productive activities at the home that do not involve market transactions. If our standard of living is adversely affected by pollution, our GDP measure does not show this fact.
Why is residential construction considered an investment rather than consumption multiple choice question?
Why do the accountants regard residential construction as investment rather than consumption? because apartment buildings and houses, like factories and stores, earn income when they are rented or leased.
How do we get the gross domestic product GDP of a country Class 10?
Methods of GDP Calculation GDP = GDP at market price – depreciation + NFIA (net factor income from abroad) – net indirect taxes.
What do you mean by the term gross domestic product What precautions should we take in calculating GDP?
production in a country or state within a time period normally a year. It is the calculation of values of all final goods and services within a year. Precaution in Calculating GDP: Not every good (or service) that is produced and sold needs to be counted. It only includes the final goods and services.
How does gross domestic product differ from gross national product?
Gross domestic product (GDP) is the value of a nation’s finished domestic goods and services during a specific time period. A related but different metric, the gross national product (GNP), is the value of all finished goods and services owned by a country’s residents over a period of time.
What happens when domestic and foreign rates of return converge?
Domestic and foreign rates of return converge, as depreciation of the euro raises returns for U.S. investors who purchase euro-based assets. Interest rates set by the European central bank during the period 1999-2004 resulted in what situation compared to that in the United States?
What happens to rates of return when the dollar depreciates?
-Domestic and foreign rates of return both fall, as the dollar depreciates. -Domestic and foreign rates of return converge, as depreciation of the euro raises returns for U.S. investors who purchase euro-based assets.
Do businesses that sell things for resale have a GDP?
Yes they certainly do, provided that the sale is being mediated by a business in the formal economy. GDP is the total value of all goods and services produced in the economy over any given period of time. Businesses that buy in things for resale are providing the service of linking the sellers of these things to the end buyers of these things.
Does the sale of second hand tools contribute to the GDP?
If the owner wants to sell these tools as second hand, he has not added any value to the tools and hence has not contributed to the GDP. The money just exchanges hands for the value of the product.