Which of the Following Observations Concerning Different Measures of National

question 260

Multiple Choice

Which of the following observations concerning different measures of national income is TRUE?

• A) GDP does not include income earned by foreigners who own resources in that nation.
• B) Using GNI can give the impression that people in less-developed countries have more income than they really do.
• C) GNI per capita is a useful figure because it gives some idea of the income level of people in the country.
• D) The less-developed nations account for the biggest share of the world's GDP.
• E) GDP is the only measure of national income.

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Definitions:

Market System

The economy operates under a system where investment decisions, production processes, and distribution plans are shaped by the principles of supply and demand, and the open market is where prices for goods and services are freely established.

Allocation Of Resources

The process of assigning available resources, or inputs, to specific uses chosen among many possible and competing alternatives in order to achieve goals.

Income Distribution

The manner in which a nation’s total earnings are divided among its population, affecting economic equality.

Self-Interest

The motivation driving individuals to pursue their own advantages or benefits, often used in economic contexts to explain rational behavior.