Gross National Income (GNI) - Explained
What is GNI?
Written by J. Mance Gordon
Updated at May 6th, 2024
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What is Gross National Income?
Gross National Income is the total of Gross Domestic Product and the income that foreign residents earn, less the income that non-residents earn in the local currency.
How to Calculate Gross National Income?
Gross National Income is calculated by adding the domestic product and foreign income a nation receives.
These are made up of the payments made by domestic businesses to local employees along with the money coming from foreign properties that the localities/residents receive.
The derived amount is further reduced by the payments that domestic business firms make to foreign employees and income that foreign residents receive from local property.
Gross National Income versus Gross Domestic Product?
GDP, referred to as Gross Domestic Product, considers domestic output of a nation, that means anything that is produced domestically by the country, while GNI takes into consideration both the Gross Domestic Product and the net income earned from overseas.
Unlike GDP, GNI includes the product and import taxes, and excludes subsidies.
How Nationality Affects Gross National Income?
The major factor that is used to identify nationality while calculating GNI is residence. So, if the residents of the nation are making expenses within the nation, that amount will be included in GNI.
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