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The expression GNP = GDP + Net Factor Income from Abroad (NFIA) means
AGNP equals GDP for any country
BNFIA is a tax adjustment
CGNP is always less than GDP
DNFIA is added to convert domestic concept (GDP) to national concept (GNP)
Answer & Solution
Correct answer: D. NFIA is added to convert domestic concept (GDP) to national concept (GNP)
GDP measures output within the territory; GNP measures output earned by residents. NFIA = income from abroad earned by residents − income earned by foreigners domestically.
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