Question : Statement 1: Gross Domestic Product (GDP) measures the value of all final goods and services produced within a country's borders.
Statement 2: Gross National Product (GNP) measures the value of all final goods and services produced by a country's residents, regardless of their location.
Option 1: Statement 1 is true, and Statement 2 is false.
Option 2: Statement 1 is false, and Statement 2 is true.
Option 3: Both Statement 1 and Statement 2 are true.
Option 4: Both Statement 1 and Statement 2 are false.
Correct Answer: Both Statement 1 and Statement 2 are true.
Solution : The correct answer is (c) Both Statement 1 and Statement 2 are true.
Statement 1 is true. Gross Domestic Product (GDP) does measure the value of all final goods and services produced within a country's borders. It captures the total economic output generated within the geographical boundaries of a country, regardless of whether the production is carried out by domestic or foreign entities.
Statement 2 is also true. Gross National Product (GNP) does measure the value of all final goods and services produced by a country's residents, regardless of their location. It takes into account the production by the country's residents, whether they are located within the country or abroad. GNP considers the earnings of residents from their productive activities, regardless of where those activities take place.
Therefore, both Statement 1 and Statement 2 are true.
