Two Statements, Two Jobs

2 questions on this screen, from this outline item's own pool, so some will test a rule you met earlier in the unit. Pick an answer, say how sure you are, then reveal. Being sure and wrong is the most useful thing that can happen here, and the coach treats it that way.

Question 1Exam level

A U.S.-headquartered company's factory in Germany reports rising output. In which U.S. measure does that output count?

A. U.S. GNP, since the company is U.S.-owned wherever it operates B. U.S. GDP, since the output is eventually sold back into the U.S. C. Germany's GNP only, since the factory sits inside Germany D. Neither GDP nor GNP; foreign output never counts toward either measure

How sure are you?

Sure Fairly sure Guessing

Correct: A. GNP is ownership-based: output produced by a country's own citizens and companies, wherever in the world they operate, so a U.S. company's German factory counts toward U.S. GNP.

B. GDP is location-based; output produced outside U.S. borders does not count toward U.S. GDP regardless of where it is later sold.

C. The factory's location inside Germany affects Germany's GDP, not its GNP claim on this output, which follows ownership instead.

D. GNP specifically counts a country's own companies' foreign output; it does not vanish from both measures.

Unit: SIE outline 1.3.3

Question 2Exam level

A U.S.-headquartered company operates a factory in Mexico. In which measure does that factory's output count?

A. U.S. GDP only B. U.S. GNP only C. Both U.S. GDP and GNP equally D. Neither; it counts only in Mexico's GDP

How sure are you?

Sure Fairly sure Guessing

Correct: B. GNP counts output produced by U.S. residents and companies wherever in the world it happens; this factory counts there, not in U.S. GDP, since GDP stops at the border.

A. GDP counts output produced inside U.S. borders; a Mexican factory is outside them.

C. The two measures draw the line differently on purpose; this factory does not count in both.

D. It does count in Mexico's GDP too, but the question is about the U.S. measures, and GNP is the one that reaches it.

Unit: SIE outline 1.3.3

Now answer