Question on: JAMB Economics - 1994
The national income of a country indicates that the gross domestic production was N17 700 million and gross domestic product was N16 800 million. The difference of N900 million represents?
A
debt repayment
B
investments abroad
C
net income from abroad
D
capital consumption
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Correct Option: C
The difference between Gross Domestic Product (GDP) and Gross National Product (GNP) represents the net income from abroad.
- GDP: The total value of goods and services produced within a country's borders, regardless of who owns the factors of production.
- GNP: The total value of goods and services produced by a country's residents, both domestically and abroad.
If GNP is greater than GDP, it means the country's residents earned more abroad than foreigners earned in the country. In this case, the difference (N900 million) indicates the net income from abroad. The provided values indicate that GNP (N17,700 million) is higher than GDP (N16,800 million). This difference represents the net income earned from abroad.
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