HOW DO YOU ADJUST GDP TO CALCULATE GNP? - ProProfs Discuss
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How do you adjust GDP to calculate gnp?



Asked by Bryton, Last updated: Nov 23, 2021

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John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

Consider that gnp represents economic activity by canadian nationals. that meansanything earned or produced by a canadian, no matter where he or she may be, mustbe included.gdp counts all production inside canadas border. that means anything produced byforeign nationals inside canadas border would have been included in gdp. anythingproduced by canadian nationals outside canadas borders would not have beenincluded in gdp.to go from gdp to gnp, you would add all economic activity from canadian nationalsoutside canadas borders, and you would subtract all economic activity from foreignnationals inside canadas borders.why would you subtract profits made by foreigners on canadian investments? themoney was earned by a foreign national and not a canadian citizen. the result of theeconomic production goes to someone other than a canadian and is therefore notincluded as part of gnp.
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