Difference Between GDP and GNP

Published on 06-May-2023

Feature

GDP

GNP

Definition

GDP refers to the total value of goods and services produced within a country's borders in a given period of time.

GNP refers to the total value of goods and services produced by a country's citizens, regardless of their location, in a given period of time.

Components

GDP includes only the value of final goods and services produced within a country's borders, regardless of who owns the factors of production.

GNP includes the value of final goods and services produced by a country's citizens, whether they are located within the country or abroad.

Ownership

GDP does not take into account the ownership of the factors of production used to produce the goods and services.

GNP takes into account the ownership of the factors of production used to produce the goods and services.

Calculation

GDP is calculated by adding up the value of all goods and services produced within a country in a given period of time.

GNP is calculated by adding up the value of all goods and services produced by a country's citizens, regardless of their location, in a given period of time.

Income

GDP does not necessarily reflect the income earned by a country's citizens or residents.

GNP reflects the income earned by a country's citizens or residents, regardless of where they are located.

Exports

GDP does not include the value of goods and services produced in a country and exported to other countries.

GNP includes the value of goods and services produced by a country's citizens, whether they are located within the country or abroad.

Imports

GDP includes the value of goods and services produced abroad and consumed within a country's borders.

GNP does not include the value of goods and services produced abroad and consumed within a country's borders.

Growth

GDP growth reflects the growth in a country's domestic economy.

GNP growth reflects the growth in a country's overall economic output, including that produced by its citizens abroad.

International Comparison

GDP is often used for international comparison of economic performance.

GNP is less commonly used for international comparison of economic performance.

Exchange Rates

GDP is usually calculated in the local currency, and then converted to a common currency for international comparison.

GNP takes into account the currency earned by a country's citizens, whether they are located within the country or abroad.

Multiplier Effect

GDP multiplier effect takes into account only the value of the final goods and services produced within a country's borders.

GNP multiplier effect takes into account the value of all goods and services produced by a country's citizens, whether they are located within the country or abroad.

National Income

GDP does not reflect the income earned by a country's citizens or residents, but only the income generated within its borders.

GNP reflects the income earned by a country's citizens or residents, regardless of where they are located.

Domestic Production

GDP measures only the value of goods and services produced within a country's borders.

GNP measures the value of goods and services produced by a country's citizens, regardless of their location.

Migration

GDP does not take into account the income earned by a country's citizens who have migrated abroad.

GNP takes into account the income earned by a country's citizens who have migrated abroad.

Foreign Investment

GDP includes the value of goods and services produced by foreign-owned companies within a country's borders.

GNP includes the value of goods and services produced by a country's citizens, whether they are located within the country or abroad.

Economic Dependency

GDP is a measure of a country's economic independence.

GNP is a measure of a country

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