China's gross national product can be calculated from China's GDP by:
A) adding the value of output produced by China's residents and sold abroad.
B) adding the income earned by China's residents from the rest of the world and subtracting payments made by China's residents to the rest of the world.
C) subtracting the value of output produced by China's residents and sold abroad.
D) subtracting the income earned by China's residents from the rest of the world and adding payments made by China's residents to the rest of the world.

Question

Quizplus · Accepted Answer

Gross national product (GNP) is the total value of goods and services produced by a country's residents, regardless of their location, while Gross Domestic Product (GDP) is the total value of goods and services produced within a country's borders, regardless of the nationality of those who produce them. To calculate GNP, we need to add the income earned by a country's residents from the rest of the world (such as remittances from abroad or profits earned by domestic corporations overseas) and subtract payments made by a country's residents to the rest of the world (such as interest payments on foreign loans or royalties paid to foreign companies). Therefore, the correct answer is B.

China's Gross National Product Can Be Calculated from China's GDP