✅ Answer: C) Both 1 and 2Both statements are correct. GDP at Market Price = GDP at Factor Cost + Indirect Taxes − Subsidies. GNP = GDP + Net Factor Income from Abroad (NFIA). These are fundamental national income accounting identities.

✅ Answer: B) 2 onlyStatement 1 is incorrect — Real GDP growth is typically LOWER than Nominal GDP growth because Nominal GDP includes inflation. Statement 2 is correct — Nominal GDP = Real GDP × Price Level, so it reflects both real output growth and inflation.

✅ Answer: B)HDI is composed of three dimensions: (1) Health — Life expectancy at birth; (2) Education — Mean years of schooling + Expected years of schooling; (3) Income — GNI per capita at PPP. It was introduced by UNDP in 1990.

✅ Answer: A) Primary sector (Agriculture)Despite contributing only ~15% to GDP, the primary sector (agriculture) employs approximately 45% of India’s workforce. This structural imbalance — high employment but low productivity in agriculture — is a key challenge for India’s development.

✅ Answer: B)Nominal GDP is measured at current year prices (includes inflation effect). Real GDP is measured at constant base year prices (removes inflation effect). Real GDP is a better measure of actual economic growth because it shows whether the economy actually produced more goods and services.

✅ Answer: C) Lower-middle income economyThe World Bank classifies countries based on GNI per capita. India falls in the lower-middle income category (GNI per capita $1,086–$4,255). India’s GNI per capita is approximately $2,200–$2,500, placing it in this category.

✅ Answer: A) Services → Industry → AgricultureIn India’s GDP: Services (Tertiary) ~60% → Industry (Secondary) ~25% → Agriculture (Primary) ~15%. Services is the largest contributor, followed by industry, and agriculture contributes the least despite employing the most workers.

✅ Answer: B)PPP adjusts exchange rates to compare the actual purchasing power of different currencies. It answers: “How much can $1 actually buy in each country?” By PPP, India is the 3rd largest economy because the rupee buys much more in India than its dollar equivalent suggests.

✅ Answer: B)Demographic dividend refers to the economic growth potential that arises when a country has a large working-age population (15-64 years) relative to dependents (children and elderly). India’s median age of ~28 years means it has a large young workforce — a potential growth driver if properly educated and employed.

✅ Answer: B) 2 onlyStatement 1 is incorrect — India is the 5th largest economy by nominal GDP (after USA, China, Germany, Japan). Statement 2 is correct — India is the 3rd largest economy by PPP (after USA and China), because the rupee has higher purchasing power within India.