Question

What is Gross National Product?

Answer 1

the total value of goods produced and services provided by a country during one year, equal to the gross domestic product plus the net income from foreign investments.

Answer 2

Indian economy is not closed economy but an open economy. India has transactions with the rest of the world in the form of exports, imports loans etc. This give rise to the concept of national or domestic Income.

Gross National Product (GNP):

1. In case of GDP, we calculate the market value of all the final goods and services
2. produced within the country.
3. This is measured by the Gross National product.
4. It is measured as the GDP plus the Net Factor income from Abroad.
5. GNP = GDP + ‘Net’ factor income from abroad.

Net Factor income from abroad = income earned by the domestic factors of production employed in the rest of the world – Factor income earned by the factors of production of the rest of the world employed in the domestic economy.