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Which of these expressions is correct?
Question

Which of these expressions is correct?

A.

If the factor income from abroad is greater than the factor income paid abroad, then GNP would be greater than GDP

B.

If the factor income from abroad is greater than the factor income paid abroad, then GNP would be lower than GDP

C.

If the factor income earned from abroad is less than the facter income paid abroad, then GNP would be grenter than GDP

D.

 If the net factor income from abroad is negative, then GNP would be greater than GDP.
 

Correct option is A

The correct answer is (a) If the factor income from abroad is greater than the factor income paid abroad, then GNP would be greater than GDP
Explanation: Gross National Product (GNP) is the total market value of all the products and services produced in one year by labor and property supplied by the citizens of a country. Unlike Gross Domestic Product (GDP), which defines the economic output within the geographical confines of a country, GNP includes net income from abroad—this includes incomes earned by residents from overseas investments minus the income earned within the domestic economy by overseas residents.
 If the factor income from abroad (income earned by residents from overseas investments) is greater than the factor income paid abroad (income earned by non-residents within the country), the net factor income from abroad is positive.
 Adding this positive net factor income to GDP (which measures the domestic production) results in a GNP that is greater than GDP.
 

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