Answer to Question #89070 in Macroeconomics for vitus jonas

Question

what are the difference between GDP and GNP and which is the better measure of income and .why?

Answer 1

Gross domestic product (GDP) is the value of a nation's finished goods and services produced within the domestic peripheries for the given time period. The gross national product (GNP) is the value of all finished goods and services produced by a country's residents who are living domestically as well as outside the country over a period of time.

      The interpretation of the GDP of an economy is limited to the geographical borders of the country, however the GNP also includes the net economic activities performed abroad by its nationals. Because of this the GNP is often considered as a better measure of national income that the.GDP.