GDP and GNP 2.10.2025

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What does GDP stand for?

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Gross Domestic Product

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Which of the following is NOT included in the GDP calculation? Consumption spending, Business investments, Government spending, Income of foreign citizens working in the country

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Income of foreign citizens working in the country

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What does GNP stand for?

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Gross National Product

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Which of the following best describes the difference between GDP and GNP?

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GDP measures total domestic production, while GNP includes income from abroad.

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Which of the following is NOT a method for calculating GNP? Income approach, Expenditure approach, Production approach, Sales approach

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Sales approach

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The Income Approach to measuring GNP calculates the total income earned by:

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Households, businesses, and the government

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Why is national income important for an economy?

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It is used to measure the economic performance and living standards.

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Which of the following is an example of an expenditure in the GNP calculation? Wages paid to workers, Government spending on infrastructure, Income earned by a citizen working abroad, Profits made by a foreign company operating in the country

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Government spending on infrastructure

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The Expenditure Approach to calculating GNP focuses on:

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The total spending on final goods and services in the economy

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Which of the following would most likely result in an increase in a country’s GNP? A decrease in government spending, A decline in export activity, An increase in income from investments abroad, A decrease in household consumption

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An increase in income from investments abroad