Econoland and Macroland Are Neighboring Countries

question 74

Multiple Choice

Econoland and Macroland are neighboring countries. Which of the following would NOT be included in the GDP of Econoland?

• A) the value of the output of a factory in Econoland that is owned by a company whose headquarters are located in Macroland
• B) the value of the output of a factory in Macroland that is owned by a company whose headquarters are located in Econoland
• C) the value of output produced by a factory in Econland that was sold in Macroland
• D) the value of output produced in Econoland that remained unsold the year it was produced

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Definitions:

Physical Capital

The stock of equipment and structures that are used to produce goods and services.

Capital Per Worker

The amount of capital (tools, machinery, and equipment) available per employee, affecting the productivity and efficiency of labor.

Output Per Worker

A measure of labor productivity calculated by dividing total output by the number of workers.

GNP

Gross National Product, which is the total value of all goods and services produced by the residents of a country within a specific time period.