A country’s economy plays a very important role in tracking its development. How much the country is using its resources and how much they are getting it back as the production of its goods and services is necessary to know.
The country’s production is measured on both domestic and international scales. The two terms are often used when it comes to knowing the country’s production. They are Gross National Product and Gross domestic product.
GNP vs GDP
The main difference between Gdp and Gnp is that Gnp is the economic value of the products and services that are produced by the citizens of the country within the country as well as on the foreign land, whereas Gdp is the economic value of the products and services that are produced by the citizens of the country within that particular country only.
Gnp stands for a Gross national product that is done on an international scale. It is done to know about the resident’s contribution to the economy of the country living in different nations of the world. Gnp focuses on how much the country is benefited from its citizens irrespective of the geographical location.
Gdp stands for Gross Domestic product that is done on a domestic scale. It is done to know the country’s economic strength and the contribution of the country’s citizens living within the country; it excludes the production of goods and services which is done in the foreign land.
Comparison Table Between GNP and GDP
| Parameters of Comparison | GNP | GDP |
| Definition | It is referred to as the market value of the goods and services produced by the citizens of the country even if they are not in their country and present in the foreign land. | It is referred to as the market value of all the goods and services produced within the country’s border such as capital and labor. |
| Purpose | It is done to get all the productions by the nationals of the country. | It is done to know only the production that happens within the country’s boundary. |
| Calculation | GNP = GDP + NR (Net income comes from assets from overseas ) – NP (Net payment outflow to overseas resources). | GDP = consumption + investment + (government spending within the country) + (exports − imports). |
| Exclusion | Exclusion the production of products and services by foreign nationals within the country. | Exclusion of the production of products and services by the citizens of the country which are not in the country’s border. |
| Measuring productivity | The measurement of the production of the services is done on an international scale. | The measurement of the production of the services is done only on a domestic scale. |
What is GNP?
A metric used to measure the economic output of the country by its citizens both living within the country’s border or in the foreign land is known as Gross National Product. It includes the economic value of all the services as well as products produced in the country as well as the profit gained from the investments done overseas.
Gnp is calculated as GNP = GDP + NR (Net income comes from assets from overseas ) – NP (Net payment outflow to overseas resources). It helps in measuring the national income of the country. It excludes the income that is generated by the foreign nationals that are residing within the country. It mainly represents how much the citizens are able to serve the country in terms of having the contribution to the economic status of the country.
What is GDP?
Gnp or Gross Domestic Product is the measurement that is done on a domestic level. Gdp is the economic value of all the production of services and products that have happened within the country and not overseas. Representing the strength of a country’s economic status, Gdp is the measure of how the country is well working. The goods and services that are even not explicitly priced in the market and are provided by the government are also included in the calculation of Gdp.
Gdp id calculated as GDP = GDP = consumption by the citizens + investment + (government spending within the country) + (exports − imports). The average consumption, spending by the government, investments, and net export is all the factors reflected by the Gdp of the country.
Main Differences Between GNP and GDP
- Gnp is the measurement of a country’s production of its services, labours, products etc., on an international scale, whereas Gdp is done on a domestic scale.
- Gnp is the economic value of the products and services that are produced by the citizens of the country within the country as well as on the foreign land, whereas Gdp is the economic value of the goods and services that are produced by the citizens of the country within the country only.
- Gnp doesn’t include the production of services and assets by foreign nationals within the country, whereas Gdp doesn’t include the production of services and assets outside of the country.
- Gnp is done to get all the productions by the nationals of the country, whereas Gdp is done to know only the production that happens within the country’s boundary.
- Gnp is done to highlight how much the residents who are not even in the country are contributing to the d=economical development of the country, whereas Gdp is done to highlight how much is the strength of the country.
Conclusion
Both these terms, Gross national product and Gross Domestic Product, are used to depict and study the country’s economic development, which results in getting the overall country’s economic status. The measurement of the production of goods and services and the market value of them is the basis to know how much the citizens are contributing.
Gross national products are used to highlight how much the residents that don’t reside in the country contribute to the economy of the country. The gross domestic product tells about the strength of the country by measurement on the domestic scale. Both terms are thus widely used for checking the health of the economy of the country.
References
- https://www.sciencedirect.com/science/article/pii/S0022199603000977
- https://www.measuringworth.com/calculators/uscompare/GDPsource06.htm