GDP and GNP may differ
A) because some income generated by domestic production may be received as income by foreign residents.
B) because some intermediate good inputs are imported.
C) because some workers are illegal aliens.
D) whenever tariff rates become excessively high.

Question

Quizplus · Accepted Answer

GDP measures the value of all goods and services produced within a country's borders, whereas GNP measures the total income earned by a country's residents and businesses, regardless of where they are located. Therefore, if some income generated by domestic production is received by foreign residents, it will be included in GDP but not in GNP, leading to a difference between the two measures.

GDP and GNP May Differ