Econoland and Macroland are neighboring countries. Which of these 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

Gross Domestic Product (GDP) measures the value of all goods and services produced within a country's borders, regardless of the nationality of the company owners. Therefore, the output of a factory in Macroland owned by a company from Econoland would not be included in Econoland's GDP, as it is produced outside Econoland's borders.

Econoland and Macroland Are Neighboring Countries