What Is the Difference Between GDP and GNP?
GDP vs GNP: What’s the Difference?
If you’re confused about the difference between GDP and GNP, you’re in good company. These two economic indicators are often taught together — and frequently misunderstood.
Let’s break them down in simple words, with examples, formulas, and links to related concepts like GRP, NNP, and GNI.
✅ Definitions in Simple Words
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GDP (Gross Domestic Product) is the total market value of all goods and services produced within a country’s borders, regardless of who owns the production assets.
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GNP (Gross National Product) is the total value of goods and services produced by a country’s citizens, regardless of location.
| Concept | Formula |
|---|---|
| GDP | GDP = C + I + G + (X − M) |
| GNP | GNP = GDP + Net Income from Abroad |
C = Consumption
I = Investment
G = Government Spending
X = Exports
M = Imports
🗺️ Easy Example to Understand the Difference
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A UK company owns a factory in France.
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The output of that French factory does not count towards UK GDP.
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But it does count towards UK GNP, because it’s a UK-owned business.
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A US company owns a factory in Manchester.
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Its output counts in UK GDP but not in UK GNP.
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🔁 What About GPD? (Common Mistake)
If you landed here wondering about “GPD,” don’t worry — we’ve got you:
👉 Is It GDP or GPD? (And Why the Difference Matters)
📍 What Is the Difference Between GDP and GRP?
GRP (Gross Regional Product) is like a zoomed-in version of GDP — it measures economic output at a regional or metropolitan level.
🧠 Learn more about this here:
👉 What Is Gross Metropolitan Product (GMP)?
🆚 GDP vs GNI vs NDP vs NNP — What’s What?
Let’s clarify the alphabet soup of economic terms:
| Term | Stands For | Key Difference |
|---|---|---|
| GDP | Gross Domestic Product | Measures output within a country’s borders |
| GNP | Gross National Product | Measures output by a country’s citizens |
| GNI | Gross National Income | GNP plus income from abroad and minus income sent abroad |
| NDP | Net Domestic Product | GDP minus depreciation |
| NNP | Net National Product | GNP minus depreciation |
See Also:
✅ Final Thoughts
Understanding the difference between GDP and GNP (and their cousins) is essential if you're studying A-Level Economics, preparing for AP Macroeconomics, or just trying to decode financial news.
Once you master GDP vs GNP, terms like GNI, NDP, NNP, and GRP start making a lot more sense — and you’ll avoid falling into the “GPD” trap.
