CUET Preparation Today
Which of the following are incorrect statements regarding Gross Domestic Product (GDP)? (A) GDP is a measure of the welfare of a country. Choose the correct answer from the options given below: |
(A), (B) and (D) only (A), (B) and (C) only (A), (B), (C) and (D) (B), (C) and (D) only |
(A), (B) and (D) only |
The correctanswer is Option 1: (A), (B) and (D) only A) GDP is a measure of the welfare of a country. This statement is incorrect. While GDP is widely used as an indicator of a country's economic activity and growth, it is not a comprehensive measure of welfare. It does not account for crucial aspects like income inequality, environmental degradation, quality of life, non-market activities (e.g., unpaid household work), or the distribution of wealth. B) Real GDP is measured at current market prices. This statement is incorrect. Real GDP measures the value of goods and services produced in an economy adjusted for inflation, meaning it uses the prices of a base year to value output. This allows for accurate comparisons of economic output over different periods. Nominal GDP, on the other hand, is measured at current market prices. C) Expenditure method estimate = Income Method estimate = Product Method estimate = GDP of a country. This statement is correct. In national income accounting, these three methods are different ways of calculating the same total value of economic activity within a country's borders.
D) Gross National Product at factor cost = GDPMP + Net factor income from abroad. This statement is incorrect. This equation shows GNP at MP. The correct relationship between Gross National Product at Factor Cost (GNPFC) and GDP at Market Price (GDPMP) is: GNPFC = GDPMP + Net Factor Income from Abroad (NFIA) - Net Indirect Taxes (NIT).
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