The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.

Question

Quizplus · Accepted Answer

Real GDP measures the value of goods and services produced within a country's borders, regardless of the ownership of the firms producing them. Real GNP, on the other hand, measures the value of goods and services produced by a country's residents, regardless of where the production takes place. Therefore, in countries where a significant fraction of domestic production takes place in foreign-owned firms, real GDP may be significantly different from real GNP.

The Values of Real GDP and Real GNP Are Almost