Question

Economists use gross national product (GNP) to measure ___

Answer 1

Economists use the gross national product (GNP) to measure the output of a nation’s citizens, regardless of where they are.

Further explanation

Gross National Product or GNP measures the total output produced by a country's residents, regardless of where they are. Therefore, any output produced by foreign residents within the country must be excluded in calculations of GNP, while any output produced by the country's residents outside of the country must be counted.

Gross national product calculates by adding these factors below:

Consumption + Government Expenditures + Investments + Exports + Foreign Production  

Another important economic measure is Gross Domestic Product (GDP). GDP measures the total output produced in the country, regardless of who they are. GDP is the most widely used to measure a country's economic activity. The difference between GNP and GDP may indicate that a country is more engaged in international trade. The larger the difference between a country's GNP and GDP, the greater international activities.

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Keywords: GNP, Gross National Product, GDP, Gross Domestic Product, International trade

Answer 2

The option (c) is correct.

Economists use the gross national product (GNP) to measure the output of a nation’s citizens, regardless of where they are.

Further Explanation:

Gross national product is defined as the market value of all services and goods produced by a country's businesses and residents, both outside and inside the country during a given time period. GNP also includes the investments made by the country's residents and businesses in the country and outside it.The GNP can be calculated as:

Y = G + I + C + X + Z

Where,

GNP = Government + Investment + Consumption + X (net exports) + Z (net factor income from abroad - net factor income to abroad)

The difference between the GDP (Gross Domestic Product) and GNP (Gross National Product) is that GDP takes into consideration the value of goods and services produced by a factor of production within the country during a given time period while the GNP also takes the market value of all services and goods which are produced by businesses and residents of a country, both outside and inside the country during a given time period.

Therefore, option (c) is correct.

Learn more:

1.      Learn more about the objective of the budget

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2.      Learn more about the revenue and expenditure

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3.      Learn more about the large expenditures

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Answer details:

Grade: Middle School

Subject: National Income

Chapter: Economics

Keywords: gross national product, the output of a nation’s citizens, the output of foreign-owned businesses within a nation.