GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut. As a result,

answer : us investment increase

Answer: c) US investment and GDP increase by same amount but US GNP increases by smaller amount

Explanation:

Investment refers to the resources invested by the private sector in the Economy as well as the Capital Expenditure in the economy to build structures such as roads, Powerplants, hospitals, etcetera.

GA Wind farm buying a large turbine generator is considered an Investment and therefore increases US Investments.

Investment is also a key component of Gross Domestic Product (GDP) calculation and so when Investment increases, so does GDP and by the same amount.

Gross National Product is another Economic measure that works almost like GDP. While GDP measures the amount of final goods and services in a country within a period, Gross National Product measures the GDP but then adds any income earned by citizens of the country in foreign lands whilst subtracting any income earned by foreign residents in the country of interest.

Because the Swedish factory will repatriate some of the profits made on the sale of the large turbine generator, this will reduce the US GNP so that it will not be the same amount as the GDP. It will however increase Sweden's GNP.