1. What is the difference between gross domestic product (GDP) and gross nationa
ID: 1192515 • Letter: 1
Question
1. What is the difference between gross domestic product (GDP) and gross national product (GNP)? What is the difference in what GDP measures compared to GNP?
2. Based on the table, what calculations must you make to determine GNP from GDP?
3. What is national income (NI)? What does NI measure?
4. Which was higher in this year, GNP or NI? By how much?
5. What calculations must you make to determine NI from GNP?
6. NI is composed of a number of categories. What category makes up the largest portion of NI?
Line 2014 2014 2014 2014 I II III IV 1 Gross domestic product (GDP) 16,984.30 17,270.00 17,522.10 17,615.90 2 Gross national product 17,243.10 17,527.00 17,794.00 17,880.60 3 Net national product 14,534.80 14,794.30 15,032.50 15,096.30 4 National income 14,710.10 14,981.30 15,256.50 15,358.20 5 Personal income 14,433.50 14,612.80 14,774.80 14,955.70Explanation / Answer
1. Whether GDP or GNP, both are the measures of national income and output. BY definition, GDP is the total value of goods and services produced within a country's boundary/territory by its nationals and foreigners over a period of time. Whereas, GNP is the estimated value of goods and services produced outside the boundary/territory of the country by its nationals.
GNP measure the net income receipts from abroad. For example if American company has outsourced one of its department to Canada, then the income generated from this department would be a component of GNP. On the contrary, GDP measure the production within the economic territory of the country, only domestically produced godds and services.
2. GNP = GDP + net factor income from abroad.
3. National income is the country's final output of all new goods and services produced in a given year. It measures the monetary value of the flow of output of goods and services produced in an economy.
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