Suppose that the BMW plant in Spartanburg, SC, produces 10 million worth of vehicles in a given year. Of this total amount, 1 million in profits are returned to the owners of the company in Germany. The 1 million in profits
A) contributes to both U.S. GDP and U.S. GNP.
B) contributes to U.S. GNP, but not U.S. GDP.
C) contributes to U.S. GDP, but not U.S. GNP.
D) contributes to neither U.S. GDP, nor U.S. GNP.
Question 2
The expected real cost to a firm of using an additional unit of capital during a period of time is the
A) user cost of capital.
B) marginal product of capital.
C) marginal cost of capital.
D) opportunity cost of capital.
