Distinguish between the following:
(i) GDP and GNP
(ii) GDP at MP and NNP at FC
(iii) GDP at FC and NNP at MP
(iv) GNP at FC and NNP at FC
(v) GNP at FC and GNP at MP
(vi) GDP and NNP (D 1988)
(vii) GNP at MP and NDP at FC
(viii) Can GDP be greater than GNP? Explain.
GNP is the gross market value of all the final goods and services produced in the domestic (economic) territory of a country in a year plus net factor income earned from abroad. Alternatively GNP is defined as 'sum of GDP and net factor income from abroad'.
(i) GDP = GNP - Net factor income from abroad (NFIA)
(ii) GDP at MP = NNP at FC + Depreciation - NFIA + Net indirect taxes
(iii) GDP at FC = NNP at MP + Depreciation - NFIA - Net indirect taxes
(iv) GNP at FC = NNP at FC + Depreciation
(v) GNP at FC = GNP at MP - Net indirect taxes
(vi) GDP = NNP - NFIA + Depreciation
(vii) GNP at MP = NDP at FC + Depreciation + NFIA + Net indirect taxes
(viii) GDP can be greater than GNP when net income earned from abroad is negative (-).
