Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 25 - Part IX - Production and Growth - Quick Check Multiple Choice - Page 546: 5

Answer

c. GDP shows a larger increase than GNP.

Work Step by Step

GDP increases because it includes the income earned within a country by residents and nonresidents. GNP will not grow as much because foreign investment into the U.S. will increase the income of residents and nonresidents for the GDP. Therefore, the GDP shows a larger increase than the GNP.
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