Which of the Following Statements Is True

question 88

Multiple Choice

Which of the following statements is true?

• A)GDP and GNP are always the same because the net factor payments from abroad is always zero.
• B)GDP is always greater than GNP because the net factor payments from abroad is always negative.
• C)GNP is always greater than GDP because the net factor payments from abroad is always positive.
• D)GDP may be greater,equal,or smaller than GNP because the net factor payments from abroad may be negative,zero,or positive.

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Definitions:

Depreciation

A method to allocate the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Worst-Case Scenario

The most severe or unfavorable outcome that may happen in a given situation, often used in planning and risk management.

Soft Rationing

An internal policy mechanism by which a company limits the amount of funding allocated to new or existing projects, without a shortage of available funds.

NPV Project

A project evaluated using the Net Present Value method, which calculates the present value of all cash flows associated with the project, minus the initial investment.