Question:
An economy where Gross National Disposable Income is higher than Gross National Income, reflects that
(1) the country is experiencing a trade deficit.
(2) the country is experiencing a trade surplus.
(3) the country’s domestic production exceeds its consumption.
(4) the country is saving more than it is investing.
(5) the country’s net foreign transfers are positive.
Correct Answer:
(5)
Answer Explanation:
The formula linking the two is: Gross National Disposable Income (GNDI) = Gross National Income (GNI) + Net Current Transfers from the Rest of the World. For GNDI to mathematically exceed GNI, the additions (Net Foreign Transfers, such as worker remittances) must be a positive number.
Topic: National Income Year: 2024
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