Practice Some Macroeconomic Identities (2.3)

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6 sample questions

Question 1.
Define GDP.
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Focus on the total production aspect.
Question 2.
What does GNP account for?
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Think of citizens earning money in other countries.
3Question 3.
What does GDP stand for?
- Gross Domestic Product
- Gross Domestic Production
- General Domestic Product
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Remember the geographic focus of GDP.
4Question 4.
True or False: GNP only accounts for domestic production.
- True
- False
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Think about citizens earning abroad.
Question 5.
If a country has a GDP of Rs 2,000 crores, receives Rs 300 crores as income from abroad, and pays Rs 200 crores to foreigners working in the country, calculate its GNP.
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Use the GNP formula and take care of the inflows and outflows.
Question 6.
Consider a scenario where GNP is Rs 1,500 crores and depreciation is assessed at Rs 100 crores. Calculate the NNP and discuss what this reveals about capital consumption.
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Think about how much of the produced goods need to be sustained for future use.

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