A country's GNP:
A) must be larger than its GDP.
B) is the total factor income earned by residents of a country.
C) includes factor income earned by foreigners.
D) excludes factor income earned abroad by Americans.

Question

Quizplus · Accepted Answer

GNP (Gross National Product) is the total factor income earned by residents of a country, which includes both domestic and foreign factor income. It measures the value of all goods and services produced by a country's residents, whether within the country or abroad. Therefore, option B is the correct answer. Option C is also partially correct as it includes factor income earned by foreigners, but it is not a necessary condition for GNP. Option A and D are incorrect as GNP is not necessarily larger than GDP and includes factor income earned abroad.

A Country's GNP