What is the difference between GDP and GNP?

Question

What is the difference between GDP and GNP?

In: 15

Answer 1

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.