Gross National Product (GNP) differs from Gross Domestic Product (GDP) in that GNP includes the value of goods and services produced by a country's residents outside the country.

• A. It includes only domestic production
• B. It excludes production by residents abroad
• C. It includes production by residents abroad
• D. It excludes domestic production

Answer: (C)

The main idea is that GNP tracks what residents own and earn, wherever they produce, while GDP tracks where production occurs. GNP adds the value of goods and services produced by a country's residents outside the country and subtracts income earned by foreigners domestically. Because of this residency focus, GNP includes production by residents abroad. For example, U.S. residents running a factory in another country contribute to U.S. GNP, even though that output isn’t counted in U.S. GDP. The other statements misstate the scope: GDP covers domestic production, while GNP emphasizes residents’ production regardless of location.