Econoland and Macroland are neighboring countries. Which of the following would NOT be included in the GDP of Econoland?
A) the value of the output of a factory in Econoland that is owned by a company whose headquarters are located in Macroland
B) the value of the output of a factory in Macroland that is owned by a company whose headquarters are located in Econoland
C) the value of output produced by a factory in Econland that was sold in Macroland
D) the value of output produced in Econoland that remained unsold the year it was produced

Question

Quizplus · Accepted Answer

GDP measures the value of goods and services produced within a country's borders, regardless of who owns the production facilities. Therefore, output from a factory in Macroland would not be included in Econoland's GDP.

Econoland and Macroland Are Neighboring Countries