GNP is defined as which of the following?

GNP is defined as which of the following?

• A. The total value of final goods and services produced within a country's borders.
• B. The total value of final goods and services produced by foreign residents in the country.
• C. The total value of final goods and services produced by the country's residents, regardless of where the production occurs.
• D. The total value of government expenditures.

Answer: (C)

GNP measures the value of final goods and services produced by a country’s residents, regardless of where that production happens. This means income earned by residents abroad is included, while production by foreign residents inside the country is not included in GNP (it would appear in GDP instead). The other ideas point to GDP or to government spending, which are not definitions of GNP. So the description that matches GNP is production by the country’s residents anywhere in the world.

GNP measures the value of final goods and services produced by a country’s residents, regardless of where that production happens. This means income earned by residents abroad is included, while production by foreign residents inside the country is not included in GNP (it would appear in GDP instead). The other ideas point to GDP or to government spending, which are not definitions of GNP. So the description that matches GNP is production by the country’s residents anywhere in the world.