Question

Consider a French-owned cheese factory located in Paris, France. Are the goods made by the cheese factory part of the U.S. Gross Domestic Product (GDP)? Are these goods included in the U.S. Gross National Product (GNP)? In two to three sentences, explain your response.

Answer 1

The answer to both questions is no:

1. The goods made in a French-owned cheese factory located in Paris, France are not part of the U.S. Gross Domestic Product (GDP) because GDP is a measure of production that only takes into account the products and services produced within the borders of a determined country during a period of time. Paris is not within the U.S. borders, so cheese produced there would not be part of the U.S. GDP.

2. The goods made in a French-owned cheese factory located in Paris, France are not included in the U.S. Gross National Product (GNP) because GNP only measures the value of products and services that are owned by a country's residents. The cheese factory is French-owned, so it's product is not included in the U.S. GNP.