The correct answer is Option 1: Only a Explanation & Key Takeaways: • Gross Domestic Product (GDP) measures the monetary value of all finished goods and services produced within a country's borders in a specific time period. • GDP does not include the income earned by the nationals outside the country; it focuses only on domestic production. • Gross National Product (GNP), on the other hand, includes the income earned by nationals outside the country's borders. • This distinction between GDP and GNP is a key concept in national income accounting. Related Concepts: • Gross Domestic Product (GDP): It is a measure of the economic output produced within the borders of a country, regardless of whether the production is carried out by domestic or foreign entities. • Gross National Product (GNP): GNP is a measure of the economic output produced by the nationals of a country, including income earned abroad, minus income earned by foreign nationals within the country. • Economic Terms to Know: • Net National Product (NNP): GNP minus depreciation of assets. • Nominal GDP vs. Real GDP: Nominal GDP is measured at current market prices, while Real GDP is adjusted for inflation. • Per Capita GDP: GDP divided by the population, used to measure the average standard of living in a country.