What is the difference between GDP and GNP?
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GNP is the measure of value of goods and services produced by a country’s citizens, both domestically and abroad. In other words, this is ALL the money/commerce generated anywhere by a given country’s citizens.
GDP on the other hand is the measure of value of all goods and services produced by a country’s citizens AND non-citizens inside the country. In other words, this is ALL the money/commerce generated from inside the borders of a given country.
GDP is gross domestic product and GNP is gross national product. GDP is all the goods and services produced within the boundaries of a nation no matter who does the work. GNP is all goods and services produced by people from a nation no matter where the actual production happens.
The top graphic here is probably a better ELI5 than I just did off the top of my head. https://www.thebalance.com/what-is-the-gross-national-product-3305847
Take two countries, we’ll call them America and Japan. America owns a factory in Japan and Japan owns a factory in america.
America’s gDp includes the output of the factory Japan owns in America but *not* the American factory in Japan. It’s what’s produced in america regardless of who produces it.
America’s gNp includes the American factory in Japan but not the Japanese factory in America. It’s what’s produced by Americans regardless of where in the world that happens.
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