Questions about course content for Econ 340, Winter 2015

Q:
I was wondering about how labor imports/exports are figured into GDP, thinking about India 
in particular, where formerly US-based jobs are being outsourced to. Does this sort of 
labor figure into India's GDP - because India is sending services abroad - or does it 
figure into the US's GDP because the companies are US-based?

A:
Any work done by labor in India is part of India's GDP, regardless of who owns the company 
and regardless of whether this work might previously have been done elsewhere.  GDP, Gross 
Domestic Product, tries to measure the production done within the geographic boundaries of 
a country, regardless of who does it.

There is another concept, GNP=Gross National Product, that measures production by the 
"nationals" of a country regardless of where they do it.  That wouldn't change the answer 
to your question, since the Indian workers are working in India.  But if they are working 
for an American company, the portion of the value of production that goes as profit to the 
American owners would be counted in US GNP.

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