Question

How does GDP differ from GNP? Which is a better measure to look at the well being of the economy and why?

Answer 1

Part a) Gross domestic product- It measures the market value of all final goods and services produced in the domestic territory of the country by the resident and nonresident for a year.

Gross National income- It measures the market value of all final goods and services produced in the domestic territory and in foreign land by the resident for a year.

GDP= GNP- Net factor income from abroad

Part 2) Gross national income is better than gross domestic product. GNP is best because it represent the population of nation have great total income as compared to income from GDP.