gross national product

(noun)

The total market value of all the goods and services produced by a nation (citizens of a country, whether living at home or abroad) during a specified period.

Related Terms

Examples of gross national product in the following topics:

  • National Income

    • A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted national income (NNI* adjusted for natural resource depletion).
    • Arriving at a figure for the total production of goods and services in a large region like a country entails a large amount of data-collection and calculation.
    • The actual usefulness of a product (its use-value) is not measured – assuming the use-value to be any different from its market value.
    • The income approach equates the total output of a nation to the total factor income received by residents or citizens of the nation:
    • GDP = C + I + G + ( X - M ); where C = household consumption expenditures / personal consumption expenditures, I = gross private domestic investment, G = government consumption and gross investment expenditures, X = gross exports of goods and services, and M = gross imports of goods and services.

  • Learning from GDP

    • There are two commonly used measures of national income and output in economics, these include gross domestic product (GDP) and gross national product (GNP).
    • This avoids an issue referred to as double counting, where the total value of a good is included several times in national output, by counting it repeatedly in several stages of production.
    • Formula: GDP (gross domestic product) at market price = value of output in an economy in the particular year - intermediate consumption at factor cost = GDP at market price - depreciation + NFIA (net factor income from abroad) - net indirect taxes.
    • Formula: GDI (gross domestic income, which should equate to gross domestic product) = Compensation of employees + Net interest + Rental & royalty income + Business cash flow
    • Formula: Y = C + I + G + (X - M) ; where: C = household consumption expenditures / personal consumption expenditures, I = gross private domestic investment, G = government consumption and gross investment expenditures, X = gross exports of goods and services, and M = gross imports of goods and services.

  • Defining GDP

    • Gross domestic product is the market value of all final goods and services produced within the national borders of a country for a given period of time.
    • Gross domestic product (GDP) is the market value of all final goods and services produced within the national borders of a country for a given period of time.
    • "X" (exports) represents gross exports.
    • "M" (imports) represents gross imports.
    • Depreciation (or Capital Consumption Allowance) is added to get from net domestic product to gross domestic product.

  • Other Approaches to Calculating GDP

    • Gross domestic product provides a measure of the productivity of an economy specific to the national borders of a country .
    • "National Income and Expenditure Accounts" divide incomes into five categories:
    • Depreciation (or Capital Consumption Allowance) is added to get from net domestic product to gross domestic product.
    • GDP = compensation of employees + gross operating surplus + gross mixed income + taxes less subsidies on production and imports.
    • In practice, however, measurement errors will make the two figures slightly off when reported by national statistical agencies.

  • The Business Cycle: Definition and Phases

    • The term business cycle refers to economy-wide fluctuations in production, trade, and general economic activity.
    • The term "business cycle" (or economic cycle or boom-bust cycle) refers to economy-wide fluctuations in production, trade, and general economic activity.
    • From a conceptual perspective, the business cycle is the upward and downward movements of levels of GDP (gross domestic product) and refers to the period of expansions and contractions in the level of economic activities (business fluctuations) around a long-term growth trend .
    • Business cycle fluctuations occur around a long-term growth trend and are usually measured by considering the growth rate of real gross domestic product.
    • In the United States, it is generally accepted that the National Bureau of Economic Research (NBER) is the final arbiter of the dates of the peaks and troughs of the business cycle.

  • GDP Equation in Depth (C+I+G+X)

    • Gross domestic product (GDP) is defined as the sum of all goods and services that are produced within a nation's borders over a specific time interval, typically one calendar year.
    • Note that buying bonds or stocks is a swapping of deeds, a transfer of claims on future production, not directly an expenditure on products.
    • Exports (X) represents gross exports.
    • Imports (M) represents gross imports.
    • Components of the expenditure approach to calculating GDP as presented in the National Income Accounts (U.S.

  • Imports: The Economics Impacts of Buying Goods from Other Countries

    • On a national level, in most countries international trade and importing goods represents a significant share of the gross domestic product (GDP).
    • Imports provide countries with access to goods and services from other nations.
    • However, the factors of production are usually more mobile domestically than internationally (capital and labor).
    • It is common for countries to import goods rather than a factor of production.
    • Imports account for a significant share in the gross domestic product (GDP) of a country.

  • Calculating GDP

    • Gross domestic product is one method of understanding a country's income and allows for comparison to other countries .
    • The income approach adds up the factor incomes to the factors of production in the society.
    • GDP = National Income (NY) + Indirect Business Taxes (IBT) + Capital Consumption Allowance and Depreciation (CCA) + Net Factor Payments to the rest of the world (NFP)
    • The output approach is also called "net product" or "value added" method.
    • GDP at factor cost plus indirect taxes less subsidies on products is GDP at producer price.

  • GDP per capita

    • Gross domestic product (GDP) per capita is the mean income of people in an economic unit.
    • Gross domestic product (GDP) per capita is also known as income per person.
    • GDP per capita is often used as average income, a measure of the wealth of the population of a nation, particularly when making comparisons to other nations .

  • How Fiscal Policy Can Impact GDP

    • Expansionary fiscal policy can impact the gross domestic product (GDP) through the fiscal multiplier.
    • The fiscal multiplier (which is not to be confused with the monetary multiplier) is the ratio of a change in national income to the change in government spending that causes it.
    • When this multiplier exceeds one, the enhanced effect on national income is called the multiplier effect.
    • The multiplier effect arises when an initial incremental amount of government spending leads to increased income and consumption, increasing income further, and hence further increasing consumption, and so on, resulting in an overall increase in national income that is greater than the initial incremental amount of spending.
    • The increase in the gross domestic product is the sum of the increases in net income of everyone affected.