Question

Jane, a Canadian national who is living and working in USA, earns a salary of 50 million dollars a year.

Which of the following statements is correctly describing his salary?

1. Although Jane is a Canadian, his earning goes under US’s GDP.

2. Since Jane is a Canadian, his earning adds to Canada’s primary income account.

3. If Jane works in the service sector, his salary goes under Canadia’s service balance.

4. If Jane works in the manufacturing sector, his salary goes under US’s good balance.

5. If Jane sends his salary from US to Canada, his salary goes under US’s balance of transfer.

Answer 1

• first statement is correct: Jane's earning will go under US's GDP even if he is Canadian because the GDP is calculated as the Sum of all goods & services produced within domestic territory of a country. It does not depend on the nationality. Since jane is working in US, thus he makes some goods/services within US. Thus his earnings would be included in US's GDP.
• Second statement is incorrect: No, his earnings would not be included in Canada's primary income Account, but US's primary income Account.
• Third statement is incorrect: Earnings accounting does not depend on the type of sector.
• Fourth statement is incorrect: Earnings accounting does not depend on the type of sectors
• Fifth statement is incorrect: No, if he sends his salary from US to Canada, then his salary would Canada's balance of transfer, not US.