Which of the Following Best Illustrates the Difference Between GDP

question 172

Multiple Choice

Which of the following best illustrates the difference between GDP and GNP?

• A) GDP measures the goods consumed by the citizens of a country, while GNP measures output exported to other countries.
• B) GDP measures the output produced by the citizens within a country, while GNP measures output produced by noncitizens within a country.
• C) GDP measures the output produced by the citizens of a country, while GNP measures output produced within the borders of a country.
• D) GDP measures the output produced within the borders of a country, while GNP measures output produced by the citizens of a country.

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Definitions:

Sales Price

The financial value assigned to a product or service available for purchase in the market.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor expenses.

Variable Cost

Expenses incurred by a business that vary directly with the level of production or sales volume, such as cost of goods sold.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used to assess the profitability of investments.