GNP Gross National Product

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Gross National Product (GNP) is a measure of a country’s economic performance, which is defined as the total value of all goods and services produced by the country’s residents, regardless of their location, within a given period of time (usually a year).

There are two methods for calculating GNP:

The income method: This method adds up all the incomes earned by the residents of a country in a year, including wages, salaries, rents, interest, and profits. This total income is then adjusted for any taxes and subsidies to arrive at the GNP.

The expenditure method: This method adds up all the spending by residents of a country in a year, including personal consumption, investment, government spending, and net exports (exports minus imports). This total expenditure is then adjusted for any income earned by foreigners in the country and any income earned by residents of the country in other countries to arrive at the GNP.

It’s important to note that GNP is different from Gross Domestic Product (GDP), which measures the value of all goods and services produced within a country’s borders, regardless of the nationality of the producers. GNP includes both domestic and international production by a country’s residents, whereas GDP only includes domestic production.

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