ECONOMICS (CBSE/UGC NET)

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ECONOMICS

GDP

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
If a country has a large proportion of its workforce working in foreign nations sending their earnings back home, its GNP will likely be ____ than its GDP.
A
lower
B
higher
C
the same as
D
as least less
Explanation: 

Detailed explanation-1: -Gross domestic product (GDP) is the value of the finished domestic goods and services produced within a nation’s borders. On the other hand, gross national product (GNP) is the value of all finished goods and services owned by a country’s citizens, whether or not those goods are produced in that country.

Detailed explanation-2: -Remittances are funds sent home by citizens who live overseas. In many poor countries, remittances are measured in the billions of dollars, and in some cases can represent a sizable portion of the gross domestic product (GDP).

Detailed explanation-3: -The compensation of employees is the money received by workers in the form of wages. This is the largest component in the income approach because the majority of the income in a country is generated by workers.

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