What is Gross National Product?
Gross National Product, known as GNP, is the total amount of final goods and services that a country produces in a given year.
How to Calculate Gross National Product?
Gross National Product is the sum of personal consumption, personal domestic investment, government spending, net exports (exports less imports), and income received by local residents as a result of foreign investments, less income received by foreign residents as a result of local investments.
Considering this statement, GNP includes the output that nations residents generate beyond the nations boundaries, and excludes anything that is generated by foreign residents within the country.
Also, GNP doesn’t take any intermediary products and services into consideration for avoiding double-counting problems.
GDP versus GNP
Gross national product includes the net income received by local residents from beyond the nations boundaries. Gross Domestic Product Does not.
Further, GNI does not include the net income that foreign residents receive from the investments made within the nation.
This is because these resources are not meant for consumption in domestic markets, as it is sent to the foreign nations.
Related Topics
- Macroeconomics
- Macroeconomic Frameworks
- Macroeconomic Policy Tools
- Productivity Economics
- One-Third Rule
- Gross Domestic Product (GDP)
- Durable and Non-Durable Goods
- Weightless Economy
- Intermediate and Final Goods or Services
- Nominal GDP
- Converting Nominal to Real GDP
- GDP Inflator
- Nominal GDP Price Index
- Measuring GDP
- Gross National Product
- Net National Product
- Factor Income
- Gross National Income
- Expenditure Method
- The Problem of Double Counting GDP
- Double Counting
- Why is Tracking Real GDP Important?
- Convert Currencies with Exchange Rates
- Convert GDP to a Common Currency
- Per Capita GDP
- GDP Per Capita
- GDP as a Measure of Society Well-Being
- Limitations of GDP as a Measure of the Standard of Living