Gross Domestic Product and Gross National Product

What is the primary difference between GDP and GNP?

• GDP includes foreign earnings while GNP doesn't

• GDP measures production within a country's borders, while GNP measures production by a country's citizens regardless of location

• GDP is always higher than GNP

• GDP only measures government spending

If a Japanese company produces cars in America, this production is counted in:

• Japan's GDP only

• Both America's GDP and Japan's GNP

• Japan's GNP only

• Neither GDP nor GNP

Which of the following best describes Gross National Product (GNP)?

• Total value of services produced within a country

• Value of all imports minus exports

• Total value of goods and services produced by a country's citizens and companies, regardless of location

• Money earned only within national borders

What does GDP stand for?

• Global Domestic Process

• Gross Domestic Production

• General Domestic Product

• Gross Domestic Product

If an American company earns profits in Mexico, these earnings are included in:

• Mexico's GNP

• America's GDP

• Mexico's GDP

• America's GNP

Which economic measure would better reflect a country's standard of living?


d. Trade balance

• GDP per capita

• Total GDP

• GNP growth rate

• Trade balance

A French citizen working temporarily in Canada contributes to:

• Canada's GNP

• Both France's GDP and Canada's GNP

• France's GNP and Canada's GDP

• France's GDP

What factor does NOT affect a country's GDP?

• Government spending

• Consumer spending

• Citizens' foreign investments

• Business investments

If a country's GNP is significantly higher than its GDP, this most likely means:

• The economy is failing

• The country has many citizens working abroad

• The country has high unemployment

• The country has high inflation

Which statement about GDP is most accurate?
d. It counts all intermediate goods

• It includes underground economy activities

• It measures all economic activity in a country

• It only counts final goods and services

• It counts all intermediate goods