The paper "Fundamentals Of Economics Questions" is an impressive example of a Macro & Microeconomics assignment. Both GDP and GNP are used in measuring the size and strength of a country’ s economy. However, they differ in a number of respects as explained below. GDP (Gross national product) refers to the estimated value of the country’ s production total worth. In this case, the country’ s production refers to the production of both goods and services produced within the country’ s boundaries within the course of one year’ s period by both the country’ s nationals and foreigners living in the country.
On the other hand, GNP (Gross national product) refers to the estimated value of the total worth of production of goods and services by citizens of a country on its land or on foreign land and is calculated within over a one year’ s period. GDP is used in assessing the strength of a country’ s local economy while GNP is used in gauging how the citizens of a given country are performing economically. Net National Product (NNP) Vs National Income (NI) NNP (Net national product) is defined as the gross national product with less capital consumption allowances. In other words, NNP is the monetary value of finished goods and services produced by a country’ s citizens whether residents or overseas within a year’ s time (GDP) less than the amount of GNP that is required in purchasing new goods to maintain existing stock. It is calculated as the total payroll compensation; add net indirect tax on current production and operating surpluses.
On the other hand, national income is the net national product less indirect business taxes. In other words, it is the total value of all goods and services produced within a given nation over a year period and it represents the sum of profits, wages, interest, rent as well as pension payments to the nation’ s residents. Real GDP Vs Nominal GDP Real GDP differ from Nominal GDP in that nominal GDP is the market or monetary value of all final goods and services that are produced in a country within a given period say one year while real GDP is the measure of the total value of the output of a country’ s economy adjusted for price changes.
In other words, nominal GDP and real GDP differ in that real GDP has been adjusted for inflation while nominal GDP has not been adjusted for inflation.
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