Gross National Product

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Gross National Product

Gross National product (GNP) is the sum total of the market values of all the final goods and service produced by the residents (nationals) of a country in a given period of one year. The word residents or nationals has been used to emphasize that whether production is done by the factor services provided by the nationals or residents of a given country, it  forms a part of Gross National product . Thus, with proper adjustments in GDP, we can arrive at the GNP as follows:

Gross National Product (GNP) = Gross Domestic Product (GDP) + Factor incomes received from abroad (-) Factor incomes paid out to foreign nationals


GNP = GDP + Net Factor Income from Abroad

Net factor Income from Abroad includes all the net inflows (receipt – payment) of wages, rents, interest, profits, royalties, fees, etc. The net inflows may be positive or negative thus making a divergence between GDP and GNP.


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