Which of the following transactions would be included in U.S.GDP but not in GNP?
A)An American tourist spends money in Mexico City.
B)The U.S.government hires an American economist to evaluate United States/Mexico trade policy.
C)A car is produced in Detroit and exported to Mexico.
D)A salary is paid to a Canadian engineer employed in the California computer industry.

Question

Quizplus · Accepted Answer

GDP includes the value of goods and services produced within a country's borders, regardless of the nationality of the workers. GNP includes the value of goods and services produced by a country's nationals, regardless of where they are located. The salary paid to a Canadian engineer working in California is included in U.S. GDP because the work is done within the U.S., but not in GNP because the engineer is not a U.S. national.

Which of the Following Transactions Would Be Included in U