2395EconomicsMedium
A country that makes large net income payments to investors in another country is likely to:
AHave smaller GDP than GNP
BGrow faster economically than the other country
CHave a large GDP than GNP
DGrow slower economically than the other country
Correct answer
C. Have a large GDP than GNP
Explanation
If a country pays a large portion of income to foreign investors, its Gross National Product (GNP) will be smaller than its Gross Domestic Product (GDP) because GNP accounts for income from abroad.