Assume that a United States-owned company operates a production facility in India, and produces $25,000,000 of goods per year at that location. Which of the following statements regarding the production of the facility is most accurate? A) The production of the facility in India would not be included in the GDP measure for the United States. B) The production of the facility in India would not be included in the GNI measure for the United States. C) The production of the facility in India would not be included in the NNI measure for the United States. D) The production of the facility in India would not be included in the GDP measure for India.
A GDP measures only finished goods domestically . . . I hope.
A.
I second A.
fo so A
Your answer: A was correct! GDP only counts the goods and services produced within the geographic boundaries of a country. T/G
The case study begins with a review of the most common measures of economic activity: gross domestic product (GDP), gross national income (GNI) and net national income (NNI). […] Among the three most widely used measures of economic activity: A) GNI is theoretically the most accurate, although not widely used because of the difficulty in quantifying the economic cost of depreciation. B) there is typically very little difference between the GDP and NNI of a country. C) GDP only counts production from within a country’s geographic boundaries, while GNI includes productivity of a country’s citizens regardless of where assets are located. D) GDP understates economic activity to the greatest degree because the production of the underground economy is not included in the measure.
C?
C) GDP only counts production from within a country’s geographic boundaries, while GNI includes productivity of a country’s citizens regardless of where assets are located. There is typically very little difference between GDP and GNI, in spite of the fact that they are two distinct measures of a country’s productivity.
I got one right!
Does NNI include depreciation?
That is my understanding.
I guess then 1) NNI should be the best theoretical measure 2) NNI is hard to estimate Do you agree with that, mwvt?
I think your right on that maratikus
Yeah, I couldn’t decide between A and C on the second one, both seem correct.
maratikus Wrote: ------------------------------------------------------- > I guess then > > 1) NNI should be the best theoretical measure > 2) NNI is hard to estimate > > Do you agree with that, mwvt? Yes. Exactly.