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Environmental Economics Question Answer

Q.

Which of the following is not a problem in comparing developed and developing countries’ GNP?

[A] GNP is understated for developed countries, since a number of items included in their national incomes are intermediate goods
[B] The economic contribution of a housewife in a peasant family may not be measured in GNP in poor country.
[C] GNP is understated for developing countries since many of their labor-intensive good have no impact on exchange rate since they are not traded.
[D] GNP is overstated for countries where the price of foreign exchange is less than market clearing price.
Answer & Explanation

Answer: Option [A]

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