GDP and GNP. anyone feel like discussing the difference?

Question

discuss the difference between GDP and GNP. Your essay should include a definition of both, specific examples of what could affect each, and a discussion of why it is more accurate to examine both when trying to determine a country’s economic success.

Answer 1

Well I won't be writing an "essay" for you, but the question itself is simple enough.

GDP is Gross Domestic Product and GNP is Gross National Product. What's the difference?

GDP is defined as the total amount of output produced within a country's borders, regardless of citizenship, while GNP is defined as the total output of the citizens of a country, regardless of location.

So let's take the example of a Japanese-owned car factory on US soil. These cars are being produced (and sold, although that's not really an issue in this case) in the US, but since the company is owned by a Japanese corporation, the income goes to Japan. So US GDP would factor in this car factory, but US GNP would not. At the same time, Japan's GDP would not count the factory, as it is not within Japan's domestic borders, but Japanese GNP would count it, because it is owned by Japanese citizens.

It's always a good idea to compare GDP and GNP to each other when attempting a nation's productivity, because both offer insights to different aspects of a national economy. One measures productive output within a country and the other measures the total income from such output (worldwide) that the country receives.

That should be enough to start you off on your essay.

Answer 2

GDP measures goods and services produced within the geographic boundaries of a country. GNP measures goods and services produced using capital controlled by the residents of a country. So the only difference between the two occurs because of cross-border business ownership. Say, a company is based in Country A and owns a factory in Country B. The product of that factory will be counted towards GDP in Country B, but not in Country A, and towards GNP in Country A, but not in Country B.

Answer 3

Hi!

The Gross Domestic Product measures the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time.

There are, however, three important distinctions within this seemingly simple definition:

1. GDP is a number that expresses the worth of the output of a country in local currency.
2. GDP tries to capture all final goods and services as long as they are produced within the country, thereby assuring that the final monetary value of everything that is created in a country is represented in the GDP.
3. GDP is calculated for a specific period of time, usually a year or a quarter of a year.

Taken together, these three aspects of GNP calculation provide a standard basis for the comparison of GDP across both time and distinct national economies.

GDP is just one way of measuring the total output of an economy. Gross National Product, or GNP, is another method.

GDP is the sum value of all goods and services produced within a country.

GNP narrows this definition a bit: it is the sum value of all goods and services produced by permanent residents of a country regardless of their location.

The important distinction between GDP and GNP rests on differences in counting production by foreigners in a country and by nationals outside of a country.

For the GDP of a particular country, production by foreigners within that country is counted and production by nationals outside of that country is not counted.

For GNP, production by foreigners within a particular country is not counted and production by nationals outside of that country is counted. Thus, while GDP is the value of goods and services produced within a country, GNP is the value of goods and services produced by citizens of a country.

hope this helps!

Cheers n chin up:)

Answer 4

C+I+G+net exports=GDP; C+I+G= GNP

(C=consumer spending, I=investment, G=government spending, NetX= (exoprts-imports))

Answer 5

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Answer 6

Are you trying to get us to do your homework for you?