Answer to Question #235446 in Economics for amanuel

Question

Discuss the difference between GDP and GNP. What about Nominal GDP and Real GDP?

Answer 1

Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. As such, it also measures the income earned from that production, or the total amount spent on final goods and services (less imports).

Gross national product (GNP) is an estimate of total value of all the final products and services turned out in a given period by the means of production owned by a country's residents. 

Nominal GDP measures a country's gross domestic product using current prices, without adjusting for inflation. Contrast this with real GDP, which measures a country's economic output adjusted for the impact of inflation.