Answer the following questions:
a. What is the difference between gross domestic product and gross national product?
b. Give an example of a transaction that would be counted in GDP but not in GNP.
c. Give an example of a transaction that would be counted in GNP but not GDP.
a. GDP is a measure of output produced within domestic borders, while GNP is a measure of output produced by domestic citizens. Specifically, GNP equals GDP plus income received by citizens for factors of production supplied abroad minus income paid to foreigners for their contribution to domestic output.
b. the production of a good or service by a foreign citizen within the domestic borders
c. the production of a good or service by a domestic citizen outside of the domestic borders
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If you were a UN advisor to Sri Lanka and recommended the unbalanced development strategy, you would suggest
a. from beginning to end, massive government planning, financing, and administering the development process, similar to the big-push strategy b. initial private investment because it is no real cost to the government but later rely on government's forward and backward linkages c. initial UN aid in infrastructure but otherwise leaving the development process to government planning and financing d. massive investment by the United Nations e. initial government investment in infrastructure but otherwise leaving the development process to private sector entrepreneurs
American productivity growth was highest in the decade of the
A. 1960's. B. 1970's. C. 1980's. D. 1990's.
An increase in the price level:
A. decreases the purchasing power of money, leading to higher interest rates, which decreases investment. B. increases the purchasing power of money, leading to lower interest rates, which increases investment. C. decreases the purchasing power of money, leading to lower interest rates, which increases investment. D. increases the purchasing power of money, leading to higher interest rates, which decreases investment.
Spot exchange typically involves:
A. some transaction costs. B. long-term contracts. C. extremely high transaction costs. D. no transaction costs.