What is the difference between GNP and GDP?

GNP and GDP are very close, and they have some similarities, but they are not the same. GNP stands for Gross National Product. It is the worth of products of a country irrespective of the geographical location. It is calculated as the difference between GDP and Net Factor Income from Abroad (GNP = GDP – NFIA) GDP stands for Gross Domestic Product.

It is the measure of produced in a particular country. It is a money value for the product of a nation. GDP is calculated as the sum of the cost of investment, consumption, net export, and Government spending (GDP = Investment + consumption + net export + Government spending).

GDP is also known as a gross domestic product. This is known to be the measurement of the raw data that will be acquired. This would need to take into account the effect of inflation plus the various comparisons of the economic output from different years. GNP would need to account the income receipts that may come from abroad.

Do remember that both the GNP and the GDP are needed to ensure that the current economy of the country is measured well. The difference between GNP and GDP are usually small when these are measured in small countries because there aren't enough receipts coming from abroad.