Since GNP exceeds GDP
,
it can be concluded that foreign production by U.S. factors of production---U.S. production by foreign factors of production.
This statement does not logically follow from the premise that GNP exceeds GDP. The difference between GNP and GDP is that GNP takes into account the production of U.S. citizens and entities on foreign soil, while GDP only measures the production within the boundaries of the United States. The relationship between foreign production by U.S. factors of production and U.S. production by foreign factors of production is not directly related to the difference between GNP and GDP.
For countries having a significant fraction of domestic production by foreign-owned factors of production, GDP will likely---GNP.
For countries that have a significant fraction of domestic production by foreign-owned factors of production, GDP will likely be lower than GNP. This is because GDP only measures the production within the country's geographic boundaries, while GNP takes into account the production of the country's citizens and entities, regardless of where it occurs. In this situation, the profits and returns from the foreign-owned factors of production will likely be repatriated to their home countries, which will reduce the domestic income and skew the GDP downwards. However, these profits and returns will be included in GNP, resulting in a higher GNP compared to GDP.
The statement that "GNP exceeds GDP" does not lead to the conclusion that foreign production by U.S. factors of production is equal to U.S. production by foreign factors of production.
GNP (Gross National Product) refers to the total value of goods and services produced by all the factors of production owned by a country's residents, both within and outside its borders. It includes the income earned by domestic factors of production abroad.
GDP (Gross Domestic Product), on the other hand, refers to the total value of goods and services produced within a country's borders, regardless of who owns the factors of production.
The difference between GNP and GDP arises from the income earned by foreign factors of production located within a country and the income earned by domestic factors of production located abroad.
Therefore, the statement that GNP exceeds GDP simply implies that the income earned by a country's residents from abroad is greater than the income earned by foreign residents within that country. It does not directly indicate the relative magnitude of foreign production by U.S. factors of production or U.S. production by foreign factors of production.