GDP v GNP

Thomas Sim PEA2066

Q.
Compare GDP and GNP.

A.
From Wikipedia:

Gross national product (GNP) is the market value of all the products and services produced in one year by labor and property supplied by the citizens of a country. Unlike Gross Domestic Product (GDP), which defines production based on the geographical location of production, GNP allocates production based on location of ownership.

GNP does not distinguish between qualitative improvements in the state of the technical arts (e.g., increasing computer processing speeds), and quantitative increases in goods (e.g., number of computers produced), and considers both to be forms of "economic growth".[1]

When a country's capital or labour resources are employed outside its borders, or when a foreign firm is operating in its territory, GDP and GNP can produce different measures of total output. In 2009 for instance, the United States estimated its GDP at $14.119 trillion, and its GNP at $14.265 trillion.[2]

                                                                            GDP                                                GNP

Stands for Gross Domestic Product Gross National Product
Definition An estimated value of the total worth of a country’s production and services, within its boundary, by its nationals and foreigners, calculated over the course on one year. An estimated value of the total worth of production and services, by citizens of a country, on its land or on foreign land, calculated over the course on one year.
Formula for Calculation GDP = consumption + investment + (government spending) + (exports − imports). GNP = GDP + NR (Net income inflow from assets abroad or Net Income Receipts) - NP (Net payment outflow to foreign assets).
Uses Business, Economic Forecasting. Business, Economic Forecasting.
Application (Context in which these terms are used) To see the strength of a country’s local economy. To see how the nationals of a country are doing economically.
Layman Usage Total value of products & Services produced within the territorial boundary of a country. Total value of Goods and Services produced by all nationals of a country (whether within or outside the country).
Ref:
http://en.m.wikipedia.org/wiki/GNP
http://www.diffen.com/difference/GDP_vs_GNP