In 2008, the value of the stocks listed on the New York Stock Exchange decreased tremendously. As a direct result:

1. U. S. GNP declined by the amount of the stock market decline but U. S. GDP was unaffected.

2. neither U. S. GDP nor U. S. GNP were affected.

3. U. S. GDP declined by the amount of the stock market decline but U. S. GNP was unaffected.

4. both U. S. GDP and U. S. GNP declined by the same amount.

Question

Berger

Business

27 July, 10:29

In 2008, the value of the stocks listed on the New York Stock Exchange decreased tremendously. As a direct result:

1. U. S. GNP declined by the amount of the stock market decline but U. S. GDP was unaffected.

2. neither U. S. GDP nor U. S. GNP were affected.

3. U. S. GDP declined by the amount of the stock market decline but U. S. GNP was unaffected.

4. both U. S. GDP and U. S. GNP declined by the same amount.

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Answers (1)

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Dana Gomez · Answer 1

Answer: 2). Neither U. S. GDP nor U. S. GNP were affected.

Explanation: Gross Domestic Product (GDP) is the total monetary value of all the final goods and services produced in a country during its financial year.

Gross National Product (GNP) on the otherhand is broad measure of the value of all finished goods and services produced in a country in one year by its nationals.

Both GDP and GNP measure goods and services and not financial assets such as shares. Hence, financial assets do NOT contribute to the GDP or GNP of any nation.