Key differences between GDP, GNP and NNP

Key differences between GDP, GNP and NNP

National income includes all income earned: wages, profits, rent, and profit income.

Gross Domestic Product (GDP)

GDP refers to a close economy. It is the total goods and services produced within the domestic territory of a country for the given financial period of time. GDP does not include exports and imports nor net factor payment from abroad. 

GDP = C + I + G

Where C is for consumption, I for investment and G government expenditure.

Gross National Product (GNP)

GNP refers to an open economy. It is value of all finished goods and services produced by its country people irrespective of the location. GNP includes export and import and Net factor from abroad also.

GNP = C + I + G + X - M

Where all things remain the same just X-M net export is added

Net National Product (NNP)

NNP refers to an open economy. Net national product or NNP is the market value of all the final goods and services that are produced by people of a nation, living domestically and abroad during a year. NNP includes export and import as well as the net factor payment. The only difference is that NNP does not includes depreciation.

NNP = GNP - Depreciation

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