Which of the Following Statements About Gross Domestic Product and Gross

question 125

Multiple Choice

Which of the following statements about gross domestic product and gross national product is true?

• A) Gross domestic product includes income payments to foreigners for their work domestically; gross national product does not.
• B) Gross domestic product includes the income earned abroad by domestic citizens; gross national product does not.
• C) Gross domestic product includes exports; gross national product does not.
• D) GDP and GNP are equal.

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Definitions:

Marginal Propensity

The ratio of the change in an economic variable (such as consumption or savings) in response to a change in another variable (such as income).

Investment Demand Curve

A graph that illustrates the inverse relationship between the rate of interest and the amount of investment demanded, holding all else constant.

Market Interest Rate

The prevailing rate at which borrowers can obtain loans and lenders receive compensation for their investment in the broader financial market, influenced by supply and demand, inflation, and central bank policies.

Business Expectations

Involves the outlook that businesses have regarding future economic conditions, influencing their decisions on investment, hiring, and production.