If GDP exceeds GNP,we know with certainty that
A)a budget deficit exists.
B)a trade surplus exists.
C)a trade deficit exists.
D)receipts of factor income from the rest of the world exceed payments of factor income to the rest of the world.

Question

Quizplus · Accepted Answer

GDP measures the total value of goods and services produced within a country's borders, while GNP measures the total income earned by a country's residents, regardless of where the production takes place. If GDP exceeds GNP, it means that the receipts of factor income from the rest of the world (income earned by the country's residents from their investments abroad, for example) exceed payments of factor income to the rest of the world (income earned by foreign residents from their investments in the country).

If GDP Exceeds GNP,we Know with Certainty That