GNP Concept
GNP forms an indicator of the economic activity of a certain country in the extent that represents the total value of the goods and services production.
Dividing the GNP by the total population is obtained the GNP per capita, indicator that measures the economic development of a country. Given the products and services prices can strongly vary between countries, GNP per capita is sometimes adjusted to the parities of the purchase power between countries.
GNP calculation
GNP of a country can be calculated using three alternative processes:
- Value of all products and services produced in a country, calculated as the sum of the values added by each company.
- Value of all income created in a country, calculated as the sum of all income paid by the owners of production factors (salaries, rents, interests and profits).
- Value of all expenses performed by the economic agents and directed to the national production, namely the consumption expenses made by the families, public expenses made by the State, investment expenses made by the companies and exports made for the exterior.
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