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JAMB Economics 1993 Question 42

Question 42

National Income

The GDP of Nigeria will be greater than her GNP if

  1. A.the value of goods and services to Nigeria is greater than the value of those from Nigeria
  2. B.consumption is greater than investment
  3. C.government expenditures are greater than the foreign aid received
  4. D.the value of goods and services produced by Nigerian businesses abroad is less than that of foreign businesses in Nigeria
Show the answer and explanation

Answer: D (the value of goods and services produced by Nigerian businesses abroad is less than that of foreign businesses in Nigeria)

Explanation

GNP = GDP + net factor income from abroad. If foreigners earn more in Nigeria than Nigerians earn abroad, net factor income is negative and GDP exceeds GNP.