WAEC Economics 2015 Paper

Concept:The difference between GDP and GNP is the net income earned from abroad.Explanation:GDP includes the value of all goods and services produced within the domestic territory of a country.This includes output by foreign nationals working inside the country.GNP includes the value of all goods and services produced by the citizens of the country, whether they are inside or outside the country.Thus, GNP is related to GDP by the formula:$$\text{GNP} = \text{GDP} + \text{Net income from abroad}$$So, the difference between them is:$$\text{GNP} - \text{GDP} = \text{Net income from abroad}$$Net income from abroad is the income earned by residents from overseas minus income earned by foreigners within the country.Answer:The difference between GDP and GNP is net income from abroad.Correct option: C.