Which of the following statements about gross domestic product and gross national product is true?
A) Gross domestic product includes income payments to foreigners for their work domestically; gross national product does not.
B) Gross domestic product includes the income earned abroad by domestic citizens; gross national product does not.
C) Gross domestic product includes exports; gross national product does not.
D) GDP and GNP are equal.

Question

Quizplus · Accepted Answer

Gross domestic product (GDP) includes income payments to foreigners for their work domestically, such as the salary paid to a foreign consultant working in the United States. Gross national product (GNP), on the other hand, includes income earned abroad by domestic citizens, such as the income earned by employees of a US company's foreign subsidiary. Therefore, option A is correct. Option B is incorrect because GDP does not include income earned abroad by domestic citizens, it only includes income generated domestically. Option C is incorrect because both GDP and GNP include exports. Option D is incorrect because GDP and GNP are different measures of a country's economic activity.

Which of the Following Statements About Gross Domestic Product and Gross