GK
INDIAN ECONOMY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A firm sells new shares worth Rs. 1,000 direct to individuals. This transaction will cause:
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Gross National Product to rise by Rs. 1,000
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Gross Domestic Product to rise by Rs. 1,000
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National Incometo rise by Rs. 1,000
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No impact on Gross National Income
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Explanation:
Detailed explanation-1: -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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