What does the term 'GDP vs GNP' most accurately describe in the context of global economics?
A. An institution that matches savers with borrowers
B. Payments not made in exchange for goods or services
C. An individual's ability to invest in stocks
D. Goods and services sold to other countries
Answer (2)
The correct answer is letter D. Goods and services sold to other countriesGross Domestic Product (GDP) and Gross National Product (GNP) are both ways to measure a country's economic output, but they are slightly different.GDP includes all goods and services produced within the country’s borders, regardless of who made them. So even if a foreign company operates in the Philippines, its production counts in our GDP.GNP, on the other hand, includes all goods and services produced by citizens or companies of a country, even if those activities happen abroad. For example, the income of Overseas Filipino Workers (OFWs) counts in GNP but not in GDP.Let’s say Toyota (a Japanese company) produces cars in the Philippines. The value of those cars is part of Philippine GDP but not GNP. But if a Filipino nurse works in Canada and sends money home, that income is counted in GNP but not in GDP.These two indicators help leaders and economists understand how productive the economy is, and whether the income is being earned at home or abroad. Both are important, especially for countries like the Philippines that depend heavily on remittances.
The correct answer is D. Goods and services sold to other countries because exports and international income play a key role in these metrics.The term 'GDP vs GNP' refers to two different ways of measuring a country’s economic output.GDP (Gross Domestic Product) measures the total value of goods and services produced within a country’s borders, regardless of who produces them (domestic or foreign companies).GNP (Gross National Product) measures the total value of goods and services produced by a country's residents, regardless of where they are in the world (domestically or abroad).So, the distinction often hinges on international trade and foreign income—which includes,Exports (goods and services sold to other countries)Income from citizens and companies abroadOther OptionsA. refers to financial intermediaries like banks, not GDP or GNP.B. refers to transfer payments (like welfare), which are excluded from GDP and GNP.C. concerns personal finance, not national economic measures.
