Which one of the following is a key distinction between Gross Domestic Product (GDP) and Gross National Product (GNP)?

The key distinction between Gross Domestic Product (GDP) and Gross National Product (GNP) lies in how income is accounted for in these two measures of economic performance. GDP reflects the total value of all goods and services produced within a country's borders over a specific time period, regardless of who produces them. This means that GDP includes the income generated by foreign companies operating domestically.

On the other hand, GNP focuses on the total income earned by a country's residents and businesses, regardless of where that economic activity takes place. This includes income earned by residents from investments or work done abroad, while it excludes income earned by foreigners within the domestic economy.

Therefore, the statement indicating that GDP excludes income from abroad while GNP includes it accurately captures the fundamental difference between these two measures. This distinction is essential for understanding how economic activity is tracked and interpreted on both national and international levels.