The value of production generated by a country's factors of production within the borders of foreign countries during a particular year was $51,000 and the production of foreign factors of production within the borders of the country during that year
was worth $80,000. Which of the following is likely to be true in this case?
A) The GDP of the country equals its trade balance. B) The GDP of the country is lower than its GNP.
C) The GDP of the country is higher than its GNP. D) The GDP of the country equals its GNP.
C
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The exchange rate
A) is the price of one country's money in terms of another country's money. B) is largely determined by Treasury budget policy. C) is not a market-determined price. D) has little impact on the balance sheet and income statements of businesses with foreign holdings.
If, under a fixed exchange rate system, the dollar price of a Mexican peso is below its equilibrium level, then the
A) dollar is overvalued. B) peso is overvalued. C) dollar has depreciated. D) peso has appreciated.