GNP and NNP: Formulas and Details

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  • GNP defined as aggregate market value of all final goods and services produced during a year.
  • Measures only market value
  • Double counting has to be avoided
  • Includes the market value of final goods only
  • Final goods are those which ready to use and not for resale or further processing.
  • Intermediate goods are those goods which are purchased for further use.
  • Why including value of final goods and of intermediate goods?

GNP at Market Price Obtained by Adding Up

  • Personal consumption expenditure
  • Gross domestic private investments
  • Net foreign investment
  • Government purchases
  • GNP = C + I + G + (X-M) + (R-P)

NNP: Net National Product/National Income at Market Prices

  • Gross national product- depreciation


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