Answer to Question #50389 in Macroeconomics for abdulla sabit

Question

Distinguish between GDP and GNP. When can GNP be greater than GDP in an economy?

Answer 1

It is necessary to note that GNP and GDP both reflect the national
output and income of an economy. The main difference is that GNP takes
into account net income receipts from abroad. We can write an
equation:
GNP = GDP + NR (Net income inflow from assets abroad or Net Income
Receipts) - NP (Net payment outflow to foreign assets).
So, GNP can be higher than GDP when a country has a positive result
from net foreign inflows.