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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