The Main Difference Between GDP and GNP Is That GNP

question 35

Multiple Choice

The main difference between GDP and GNP is that GNP excludes:

• A)​net income of foreigners.
• B)​consumption of fixed capital.
• C)​transfer payments.
• D)​government purchases.

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Definitions:

Pollution Tax

A financial charge imposed on the emission of pollutants, intended to motivate reductions in harmful environmental discharges.

Unit of Production

A single complete item or a specified amount of a commodity produced.

Positive Externality

An economic situation where a third party benefits from a transaction or activity they are not directly involved in.

Negative Externality

A cost suffered by a third party due to an economic transaction or activity, without compensation, such as pollution from a factory affecting nearby residents.