An Italian company operates a pasta restaurant in the U.S.The profits from this pasta restaurant are included in

Question

Quizplus · Accepted Answer

GDP measures the value of all final goods and services produced within a country's borders, regardless of the nationality of the producers, while GNP measures the income earned by all citizens and businesses of a country, regardless of where the production takes place. As the profits from the pasta restaurant in the U.S. are earned by an Italian company, they are included in the Italian GNP but not in the U.S. GNP. However, as the production is taking place within the borders of the U.S., the profits are included in the U.S. GDP. Therefore, the profits from the pasta restaurant are included in the U.S. GDP and the Italian GNP, making choice C the best answer.

An Italian Company Operates a Pasta Restaurant in the U