2961EconomicsMedium
Which of the following is not a problem in comparing developed and developing countries GNP?
AGNP in understated for developing countries since many of their labor intensive good have no impact on exchange rate since they are not traded
BGNP is understated for developed countries, since a number of items included in their national incomes are intermediate goods
CThe economic contribution of a housewife is a peasant family may not be measured is GNP is poor country
DGNP is overstated for for countries where the price of foreign exchange is less than market clearing price
Correct answer
B. GNP is understated for developed countries, since a number of items included in their national incomes are intermediate goods
Explanation
The correct answer is GNP is understated for developed countries, since a number of items included in their national incomes are intermediate goods.