Question

An American company operates a fast food restaurant in Romania. Which of the following statements is accurate? Multiple Choice The value of the goods and services produced by the restaurant is included in Romanian GDP, U.S. GDP and U.S. GNP. The value of the goods and services produced by the restaurant is included in Romanian GDP, but not in U.S. GDP. U.S. GNP increases. The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in Romanian GDP. One-half of the value of the goods and services produced by the restaurant is included in Romanian GDP, and the other one-half of the value is included in U.S. GDP.

Answer 1

Answer:

The value of goods and services produced will be in included in Romanian GDP but not in US GDP, though it will be included in the US GNP.

Explanation:

GDP is defined as the value of final goods and services produced within the geographical boundaries of a nation in a financial year.

Since the goods and services are produced with in Romanian borders, they will included in Romanian GDP but not in US GDP.

GNP is the net factor income from abroad along with domestic GDP. Net factor income from abroad is income of domestic residents from foreign countries minus income of foreigners from domestic territory.

The value of goods and services created by the restaurant will be included in the US GDP.