ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Where GDP looks at the value of goods and services produced within a country’s borders, GNP is the market value of goods and services produced by all citizens of a country-both domestically and abroad.

Detailed explanation-2: -Only goods and services produced domestically are included within the GDP. That means that goods produced by Americans outside the U.S. will not be counted as part of the GDP.

Detailed explanation-3: -GNP is commonly calculated by taking the sum of personal consumption expenditures, private domestic investment, government expenditure, net exports, and any income earned by residents from overseas investments, then subtracting income earned by foreign residents.

Detailed explanation-4: -GNP does not include foreign residents’ income earned within the country. GNP also does not count any income earned in India by foreign residents or businesses, and excludes products manufactured in the country by foreign companies.