Gross National Product (GNP) is calculated by adding ___ to the Gross Domestic Product (GDP) of a country.
- durable (or capital / physical)
- Net Factor Income from Abroad (NFIA)
- multiplier
- product
Answer: Net Factor Income from Abroad (NFIA)
While GDP measures the value of goods and services produced within a country's geographical boundaries regardless of nationality, GNP measures the total value produced by the residents of a country, both domestically and abroad. Therefore, GNP = GDP + (Factor income earned by domestic residents abroad - Factor income earned by foreign residents domestically).