When Americans invest in Russia, the income of Russians (that is, Russian GNP) rises by more than production in Russia (that is, Russian GDP).

Question

Quizplus · Accepted Answer

Gross National Product (GNP) measures the income of a country's residents and businesses, regardless of where it is produced, while Gross Domestic Product (GDP) measures the total value of all goods and services produced within a country's borders. When Americans invest in Russia, it increases Russia's GDP because the production occurs within Russia. However, the income generated from this investment (e.g., profits repatriated to American investors) would not increase Russian GNP by more than the increase in GDP, as part of the income flows out of Russia to the American investors.

When Americans Invest in Russia, the Income of Russians (That