Question

A country in which a significant fraction of domestic production takes place in foreign owned factories and facilities is most likely a country where OGNI is much larger than GDP. GDP is math larger than GNI. GDP is equal to GNI. GDP is not comparable to GNI.

Answer 1

A country with substantial domestic production in foreign-owned facilities is likely to have a larger GNI than GDP, as GNI accounts for income generated by nationals and firms abroad, not just domestic output.

Step-by-step explanation:

In the context of a country with significant domestic production taking place in foreign-owned factories, the Gross National Income (GNI) is likely much larger than the Gross Domestic Product (GDP). GDP measures the total value of goods and services produced within a country's borders, while GNI includes goods produced by the citizens and firms regardless of where they are located. If domestic businesses and labor are contributing abroad in a substantial way, and the payments from foreign labor and businesses within the country are smaller in comparison, the GNI would reflect this additional income and be larger than the GDP.

For countries with a significant share of their population working abroad and sending remittances home, such as small nations, the difference between GDP and GNI can be notable. In contrast, for countries like the United States, the difference is usually minimal. The World Bank utilizes GNI to classify nations according to economic status because it measures wealth based on income, not just output. Hence, in the case of a country with vast foreign investments and expatriate workers, one would expect the GNI to surpass GDP.

Answer 2

In a country where domestic production is significantly carried out by foreign-owned entities, the Gross National Income (GNI) is likely to be much greater than the Gross Domestic Product (GDP). GNI includes income from citizens and firms domestically and abroad, whereas GDP only includes domestic production.

Step-by-step explanation:

A country where a significant fraction of domestic production takes place in foreign-owned factories and facilities would most likely have a Gross National Income (GNI) that is much larger than its Gross Domestic Product (GDP). This is because GDP only accounts for what is produced within a country's borders, while GNI includes all goods and services produced by the residents of a country, whether within or outside its borders. For nations with a significant number of businesses and individuals working abroad, the value sent back to the country can result in a much higher GNI compared to GDP.

Moreover, when a substantial share of a country's population is working abroad and sending remittances back home, this can also contribute to a larger GNI. On the other hand, if significant payments are made to foreign labor and businesses in the country, it would reduce the national income, thus GNI could be lower than GDP. However, it's worth noting that the World Bank now uses GNI to classify nations economically because it measures wealth based on income, not just output.