GDP per capita vs GNI per capita relationship.

GDP per capita vs GNI per capita relationship.

• A. GDP per capita includes income from abroad.
• B. GNI per capita measures only domestic production.
• C. GDP per capita equals the total value of goods and services produced by all residents, including income earned abroad.
• D. GNI per capita equals GDP per capita plus net income from abroad per person.

Answer: (D)

Understanding how GDP per capita and GNI per capita relate highlights the difference between production within a country's borders and the income residents actually earn, including from abroad. GDP per capita is the value of all goods and services produced inside the country, regardless of who owns the production. GNI per capita, however, adjusts that by adding income residents earn from abroad and subtracting income foreigners earn domestically; in other words, GNI equals GDP plus net income from abroad. So per person, GNI per capita = GDP per capita + net income from abroad per person. This captures the idea that a country’s residents may receive earnings from outside the country that aren’t counted in domestic production alone. In short, GDP focuses on where production happens; GNI focuses on who earns income, including cross-border earnings. The other statements mix up these distinctions: GDP per capita does not include income from abroad, GNI per capita is not just domestic production, and the per-person relation is a sum of GDP per person and net income from abroad per person.

Understanding how GDP per capita and GNI per capita relate highlights the difference between production within a country's borders and the income residents actually earn, including from abroad. GDP per capita is the value of all goods and services produced inside the country, regardless of who owns the production. GNI per capita, however, adjusts that by adding income residents earn from abroad and subtracting income foreigners earn domestically; in other words, GNI equals GDP plus net income from abroad.

So per person, GNI per capita = GDP per capita + net income from abroad per person. This captures the idea that a country’s residents may receive earnings from outside the country that aren’t counted in domestic production alone.

In short, GDP focuses on where production happens; GNI focuses on who earns income, including cross-border earnings. The other statements mix up these distinctions: GDP per capita does not include income from abroad, GNI per capita is not just domestic production, and the per-person relation is a sum of GDP per person and net income from abroad per person.