The Principle Difference Between GDP and GNP Is That GNP

question 73

Multiple Choice

The principle difference between GDP and GNP is that GNP measures , while GDP measures .

• A)the value of total output produced by Canada; wages and salaries received by Canadian residents.
• B)total income generated by Canadians, both domestic and abroad; total income generated by Canadians, domestic only.
• C)the total amount of income received by Canadian residents; the value of total output produced in Canada.
• D)wages and salaries, plus world- wide investment income received by Canadian residents; the value of total output produced in Canada.
• E)total factor incomes in the economy; total expenditure in the economy.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decline in value over time.

Accelerated Depreciation

A method of calculating the depreciation of an asset that assumes the asset will lose value more quickly in its initial years of use.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly, resulting in equal depreciation expenses per year.

Fixed Asset Turnover Ratio

An efficiency ratio that measures a company's ability to generate net sales from its fixed-asset investments, such as property, plant, and equipment.