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Q. Multiple Choice WITH Explanation.
1) Use equations to support your answer to this
question. Do not forget to explain
your reasoning. No credit without explanation. Let GDP and GNI be
the gross domestic
product and the gross national income of Brazil. Suppose that in
2019, Brazil’s
GDP = 1.86 trillion dollars and its GNI = 1.65 trillion dollars.
Also assume that in
that year the trade balance, net unilateral transfers, and the
investment income
of Brazil were different from zero. Which of the following options
is the most
plausible explanation to the fact that for that year GDP > GNI
in Brazil?
(a) Brazil had a trade balance surplus.
(b) Brazil had a trade balance deficit.
(c) The sum of the net investment income and net international
compensation to employees
was positive.
(d) The sum of the net investment income and net international
compensation to employees
was negative.
(e) Because the net unilateral transfers and the investment income
of Brazil were both positive.
Answer d) The sum of net investment income and net international compensation to employees was negative.
GDP , the gross national product takes in all the services and goods those which are produced in a nation however the GNI are the investments and income or any aid also which is given to the domestic or native nation
GDP - Consumption + Investment + Government spending + (export - import)
GNI - GDP + wages + salaries + property income of country's residents earned abroad and at home + net taxes and subsidies from foreign Organisation
Thereafter , the net investment income and net international compensation to employees is negative it will bring fall in GNI
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