In 5 pages this paper examines how a country's economic development and progress can be assessed by using GDP and GNP and the accuracy of these methods is also evaluated. Two sources are cited in the bibliography.
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of estimating the level of activity which is taking place in a particular economy are the GNP and GDP; up until recently the GNP was the most widely used. In
order to investigate why this should be, the differences and similarities between the two measures and which is the most effective, it is helpful to define the two terms and
consider the advantages and flaws of both. In addition, it is useful to consider whether GNP/GDP can be seen as a complete and reliable way of measuring economic growth, or
whether there are other elements which need to be taken into account in order to obtain an accurate picture.
The GNP, or Gross National Product, is an estimated annual figure which represents the entire financial value
of all the goods and services which are produced in a particular country. The figure refers only to those items which are manufactured, or services which are provided, through the
factors of production owned by the residents of that country: factors of production can incorporate a number of elements such as land, labour force, and capital. In addition, the estimate
takes into account only the final product: for example, the revenue gained from selling raw materials to a manufacturer is not included if the price of the manufacturers final product
has already been counted. The
GDP, or Gross Domestic Product, is an estimated figure calculated in a similar way, but rather than referring to the factors of production owned by the nations inhabitants, it takes