Gross Domestic Product (GDP) vs Gross National Product (GNP)
Gross Domestic Product (GDP) and Gross National Product (GNP) are related concepts in AP Economics that students often mix up. In short: gross domestic product (gdp) is gross Domestic Product is the total market value of all final goods and services produced within a country in a given period of time. Meanwhile, gross national product (gnp) is gNP is the total value of goods and services produced by a country's residents, wherever in the world they produce them. Here is how they compare side by side.
Gross Domestic Product is the total market value of all final goods and services produced within a country in a given period of time.
It measures the economic output of a nation and is used to gauge economic health. Only final goods are included to avoid double-counting intermediate goods. GDP includes production by both domestic and foreign entities within the country’s borders.
GNP is the total value of goods and services produced by a country's residents, wherever in the world they produce them.
Unlike GDP, which counts output produced within a country's borders, GNP counts output by a nation's people and firms regardless of location. GNP = GDP + income earned abroad by residents − income earned domestically by foreigners.