Gross Domestic Product and Gross National Product

What does GDP stand for?

• Gross Domestic Product

• Global Domestic Product

• General Domestic Product

• Gross National Product

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

What does GNP stand for?

• Global National Product

• Gross National Product

• General National Product

• Gross Domestic Product

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

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

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

• Both measure the total value of all goods and services produced in a country.

• GDP and GNP are the same thing and can be used interchangeably.

Which of the following is NOT a method for calculating GNP?

• Income approach

• Expenditure approach

• Production approach

• Sales approach

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

• Only the government

• Households, businesses, and the government

• Households and businesses, excluding foreign earnings

• The labor force in the country

Why is national income important for an economy?

• It helps in determining government tax policies only.

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

• It helps in tracking changes in weather patterns.

• It determines the size of a country’s population.

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

The Expenditure Approach to calculating GNP focuses on:

• The total value of goods and services produced

• The total spending on final goods and services in the economy

• The income earned by workers

• The production of agricultural products only

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