A Level Economics (9708)•9708/12/O/N/23

Explanation
GNI = GDP + Net Factor Income from Abroad
Steps:
- Use formula: GNI = GDP + (factor income by residents abroad - factor income by non-residents domestically)
- Identify values: GDP = 100 bn, residents' abroad income = 10 bn, non-residents' domestic income = 25 bn
- Compute net income: 10 bn - 25 bn = -15 bn
- Calculate GNI: 100 bn + (-15 bn) = 85 bn
Why B is correct:
- Per UN definition, GNI equals GDP adjusted by net primary income from abroad (residents' foreign earnings minus non-residents' domestic earnings), yielding 85 bn.
Why the others are wrong:
- A: Subtracts only non-residents' income (100 - 25 = 75), ignoring residents' abroad earnings.
- C: Adds only residents' abroad income (100 + 10 = 110), ignoring non-residents' domestic earnings.
- D: Adds both incomes (100 + 10 + 25 = 135, but choice is 115—still incorrectly includes outflow as inflow).
Final answer: B
Topic: National income statistics
Practice more A Level Economics (9708) questions on mMCQ.me