Daily Current Affairs Quiz: November 26, 2025

Answer: B [GNP = GDP + NFIA, where NFIA includes net receipts of factor incomes like rent, interest, profits, and wages.]
Explanation:

A is Incorrect: The formula is GNP = GDP + NFIA, not GNP = GDP – NFIA. Also, NFIA encompasses more than just wages and salaries.

B is Correct: GNP is calculated by adding NFIA to GDP. NFIA comprises the net income earned from all factors of production (rent, interest, profits, and wages) employed abroad.

C is Incorrect: The formula is incorrect. Also, NFIA is broader than just capital gains. It includes all factor incomes.

D is Incorrect: GNP is not calculated by multiplying GDP and NFIA. NFIA is added to GDP, and it doesn’t function as a multiplier for international trade.

Answer: C [2, 3 and 5 only]
Explanation:

Statement 1 is incorrect: A good’s classification as a capital good depends on its use, not the purchaser. For instance, a washing machine used by a household is a consumer good, but the same machine used by a laundry business is a capital good.

Statement 2 is correct: Investment in capital goods enhances productive capacity, directly impacting a nation’s potential output. This spending is accounted for as investment expenditure in national income calculations.

Statement 3 is correct: The demand for capital goods is derived from the demand for the final goods and services they help produce. Increased demand for final goods stimulates demand for capital goods to expand production.

Statement 4 is incorrect: Depreciation is considered in calculating both NDP (Net Domestic Product) and GDP (Gross Domestic Product). NDP accounts for depreciation by subtracting it from GDP (NDP = GDP – Depreciation).

Statement 5 is correct: Changes in inventories of capital goods, like unsold machinery, are part of investment expenditure and therefore affect GDP calculations. This reflects the value of capital goods produced but not yet sold or put into use.

Answer: C [2, 3 and 4 only]
Explanation:

Statement 1 is incorrect: National income at basic prices is calculated by subtracting Net Indirect Taxes (Indirect Taxes – Subsidies) from NDP at market prices, not adding them.

Statement 2 is correct: Basic prices include subsidies given by the government, because subsidies reduce the effective price paid by producers.

Statement 3 is correct: Basic prices exclude indirect taxes, since these are added to reach market prices.

Statement 4 is correct: National income at basic prices represents the total value of goods and services produced in a country at prices actually received by producers.

Answer: A [Purchase of shares in the stock market]
Explanation:

GDP at market prices includes all final goods and services produced in a country in a given year. Buying shares is a financial transaction — it doesn’t involve any production of goods/ services. Hence, it is not included in GDP.

Answer: C [Statement 1 is correct but Statement 2 is incorrect]
Explanation:

Statement 1 is correct: NDP at Factor Cost is calculated by subtracting depreciation (also known as capital consumption allowance) from GDP at Factor cost.

Statement 2 is incorrect: Depreciation represents the consumption of fixed capital which can reduce the GDP to NDP; it cannot be negative, and thus NDP cannot be greater than GDP.