CFA Practice Question

There are 341 practice questions for this study session.

CFA Practice Question

If substantially more foreign money is invested in Ireland than Irish citizens have invested abroad, then one will likely expect ______

A. Irish net foreign factor income to be positive.
B. Irish GDP to exceed Irish GNP.
C. Irish GNP to exceed Irish GDP.
Correct Answer: B

Net foreign factor income is the difference between the foreign income of one's citizens and the income of residents who are not citizens. If more foreign money is invested in Ireland than Irish citizens have invested abroad, it is likely that the income of Irish residents who are not citizens will exceed the foreign income of Irish citizens. That is, net foreign factor income will be negative and GDP will exceed GNP in Ireland.

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