Question

Gross National Income (GNI) is measured differently than Gross National Product (GDP). Choose the correct term to complete each sentence on the calculation of GNI. GDP is calculated by adding the income of all entities in the US. Then GNI is calculated by adjusting GDP first by deducting made to other countries from received from other countries. Then, are subtracted from the received from other countries. Finally, property and business-related transfer payments made to other countries for foreign income are deducted.

Answer 1

The GDP is used to measure the market value of the goods, services and structures produced in a given period of time located in the US. On the other hand, the GNI measures the costs and the incomes in the production of Gross National Product. This difference between the GDP and the GNP is that GNP includes the production of US residents from all the world. So, for example, the profits of a plant owned by an American resident in India counts for the GNP but not for the GDP. After explaining this, the answer will be “GDP is calculated by adding the income of all entities in the US. Then GNI is calculated by adjusting GNP first by deducting made to other countries from received from other countries. Then, are subtracted from the received from other countries. Finally, property and business related transfer payments made to other countries for foreign income are deducted”.