Introduction

Gross national income (GNI): Activities

1 Gross national income is a geographical concept.

Incorrect. The statement is false.

GDP is a geographical concept since it deals with the production that occurs within the geographical borders of a country. GNI, on the other hand, deals with the income that is earned by South African citizens or permanent residents, irrespective of where it is earned.

Correct. The statement is indeed false.

GDP is a geographical concept since it deals with the production that occurs within the geographical borders of a country. GNI, on the other hand, deals with the income that is earned by South African citizens or permanent residents, irrespective of where it is earned.

2 Dividends that are paid to foreign shareholders in South African companies are part of …

Incorrect.

Dividends that are paid to foreign shareholders in South African companies are part of primary income to the rest of the world. They are earned and paid to people that are not permanent residents of South Africa.

Correct.

Dividends that are paid to foreign shareholders in South African companies are part of primary income to the rest of the world. They are earned and paid to people that are not permanent residents of South Africa.

3 The wages and salaries that are earned by South African citizens working in Germany are part of …

Correct.

The wages and salaries that are earned by South African citizens working in Germany are part of primary income from the rest of the world. They are earned by South Africans from the rest of the world.

Incorrect.

The wages and salaries that are earned by South African citizens working in Germany are part of primary income from the rest of the world. They are earned by South Africans from the rest of the world.

4 GNI excludes primary income to the rest of the world (i.e. the remuneration earned by foreign factors of production in the domestic economy).

Correct. The statement is indeed true.

Gross national income = gross domestic product plus primary income from the rest of the world minus primary income to the rest of the world.

Incorrect. The statement is true.

Gross national income = gross domestic product plus primary income from the rest of the world minus primary income to the rest of the world.

5 If primary income from the rest of the world is less than primary income to the rest of the world, then …

Correct.

GDP is greater than GNI. GNI = GDP plus primary income from the rest of the world minus primary income to the rest of the world. Since primary income from the rest of the world is less than primary income to the rest of the world, it follows that GDP must be higher than GNI. For example, if GDP is R100 million, primary income from the rest of the world is R10 million and primary income to the rest of the world is R15 million, then GNI = R100 million + R10 million – R15 million = R95 million.

Incorrect.

GDP is greater than GNI. GNI = GDP plus primary income from the rest of the world minus primary income to the rest of the world. Since primary income from the rest of the world is less than primary income to the rest of the world, it follows that GDP must be higher than GNI. For example, if GDP is R100 million, primary income from the rest of the world is R10 million and primary income to the rest of the world is R15 million, then GNI = R100 million + R10 million – R15 million = R95 million.

6 If GDP is less than GNI, then …

Correct.

GNI = GDP plus primary income from the rest of the world minus primary income to the rest of the world. For example, if GDP is R100 million, primary income from the rest of the world is R12 million and primary income to the rest of the world is R10 million, then GNI = R100 million + R12 million – R10 million = R102 million.

Incorrect.

GNI = GDP plus primary income from the rest of the world minus primary income to the rest of the world. For example, if GDP is R100 million, primary income from the rest of the world is R12 million and primary income to the rest of the world is R10 million, then GNI = R100 million + R12 million – R10 million = R102 million.