SS2 Econ about GDP

ASSUMPTION: If the HK factory imports workers from mainland without affecting the local employees, the profit of the company will increase because of the cheap labour from mainland workers.


DEFINITION:
GDP = Gross Domestic Product, it refers to the total money earned from the goods produced locally only ( HK's GDP: all the factories produce the goods that is made of Hong Kong)


GNP = Gross National Product, it refers to the money earned by the people of the same nations ( e.g Hk workers in US, they earned income + Hong Kong workers worked locally 's income )


A) Ans: If they are imported on a half year based contract, The GDP of HK will not increase because the GDP is counted on a one year's basis.because there is more output of the toy factories.
The GNP of Hong Kong will remain unchange because as u stated, the imported workers from CHina will not affect the domestic workers. However, if at first, there is 10HK workers employed, if now 9HK + 1CHINA, then the GNP of HK will slighly decrease.


B) If on a 3 years contract, The GDP of HK will increase greatly because many things can be produced within 3 years and the production will increase.
The GNP of HK will remain unchanged since the Mainland workers are not considered as HK people. However, if the gov issue a law that the workers imported can get the HK ID within 1 years that they lived in HK, the HK GNP will increase.