Question

What is the difference between GDP and GNP explain with example. I need clear difference.

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Answer 1

Gross Domestic Product(GDP) and Gross National Product(GNP) are the measures of the economic welfare or national output level of any country.

Explanation:

Key differences between GDP and GNP:-

• GDP basically estimates the national income,national output or national expenditure in the economy whereas,GNP constitutes GDP and net property income from abroad such as any foreign interests,dividends and profits.
• GDP is confined to the economic activities within the country but in contrast,GNP includes both the domestic economic activities as well as any financial or monetary inflow from economic activities outside the country.
• GNP is helpful in analyzing the economic performance of an open economy but although,GDP is more applicable to closed economy,it is still used as an universal parameter of economic growth.
• GDP includes the net income earned by the foreign multinational companies(MNCs) operating within the country.GNP does not include the net income of the MNCs in the country if the company profit is send back to their country of origin.

Answer 2

Answer:

Answer:What is GDP??

Answer:What is GDP?? GDP measures the value of goods and services produced within a country's borders, by citizens and non-citizens alike.

What is GNP??

GNP measures the value of goods and services produced by only a country's citizens but both domestically and abroad.

Examples

GDP

Let's briefly examine each of the components of GDP. Consumer spending, C, is the sum of expenditures by households on durable goods, nondurable goods, and services. Examples include clothing, food, and health care. Investment, I, is the sum of expenditures on capital equipment, inventories, and structures.

GNP

If the income earned by domestic firms in overseas countries exceeds the income earned by foreign firms within the country, GNP is higher than the GDP. For example, the GNP of the United States is $250 billion higher than its GDP due to the high number of production activities by U.S. citizens in overseas countries

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