GDP plus the income accruing to domestic residents as a result of investments abroad, minus the income earned in domestic markets accruing to foreigners abroad.
An estimate of the total
money value of all the final goods and services produced in a given one-year period by the
factors of production owned by a particular country's residents. ("Final" goods and services means goods and services sold or otherwise provided to their final consumers -- that is, to avoid double counting, the value of steel sold to GM to make a car is not added separately into the GNP or GDP totals because its value is already included when we add in the final sales price of the car to the customer.)
GNP and GDP are very closely related concepts in theory, and in actual practice the numbers tend to be pretty close to each other for most large industrialized countries. The differences between the two measures arise from the facts that there may be foreign-owned companies engaged in production within the country's borders and there may be companies owned by the country's residents that are engaged in production in some other country but provide income to residents. So, for example, when Americans receive more income from their overseas
investments than foreigners receive from their
investments in the United States, American GNP will be somewhat larger than GDP in that year. If Americans receive less income from their overseas
investments than foreigners receive from their US
investments , on the other hand, American GNP will be somewhat smaller than GDP.
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