Which of the following statements about GDP at market prices are correct?
(A) It is equal to C + I + G + X − M.
(B) It includes production done by non-residents within the country.
(C) Everything in it is valued at factor cost.
(D) It is the market value of all final goods and services produced within the domestic territory in a year.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (B) and (D) only
GDP at market prices is a domestic measure, valued at market prices, of all production within the territory, by residents or non-residents.
(A) It is equal to C + I + G + X − M. — True. By the expenditure method, GDPMP = C + I + G + X − M.
(B) It includes production done by non-residents within the country. — True. Production by non-residents within the country is included.
(C) Everything in it is valued at factor cost. — False. Everything is valued at market prices, not factor cost.
(D) It is the market value of all final goods and services produced within the domestic territory in a year. — True. It is the market value of final goods and services produced within the domestic territory.
NCERT (2026-27): “Table 2.4: Basic National Income Aggregates GDP is the market value of all final goods and services produced within a domestic territory of a country measured in a year. |