Suppose U.S.-based Intel Corporation builds and operates a new computer chip factory in Honduras.Future production from such an investment would

Question

Quizplus · Accepted Answer

GDP measures the value of goods and services produced within a country's borders, regardless of who owns the production. Since the factory is located in Honduras, its production contributes to Honduran GDP. However, GNP measures the value of goods and services produced by a country's residents, regardless of where they are located. Since Intel is a U.S. company, the profits from the factory would contribute to U.S. GNP, not Honduran GNP.

Suppose US