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Gross Domestic Product (GDP)
and
Gross National Product (GNP)
What you will learn ...
Gross domestic product (GDP)
Gross national product (GNP)
Why might GDP and GNP differ?
Take this challenge
Gross domestic product
Gross domestic product (GDP) is a measure of the total
final goods and services produced by
monetary value of _______________________
resident producing units of a territory or an
all ________________________
economy over a specified period of time, usually a year or a
quarter.
xamples of Hong Kong’s resident producing units:
Gross national product
Gross national product (GNP) measures the
total income earned by residents of an
________________________________
economic activities
economy from engaging in __________________.
Key Points Parade
residents
Why might GDP and GNP differ?
GNP may not be equal to GDP because:
1. our resident producing units (RPUs)
may use factor services provided by
non-residents
_____________.
Example
2. our residents may provide factor
services _______.
abroad
Example
Why might GDP and GNP differ?
We can find GNP from GDP:
factor income
factor income
from abroad - paid abroad
GNP = GDP + (_____________________________)
net factor income from abroad
Take this challenge 1
Q Paul, a Hong Kong resident, receives dividends from a
UK company. How does this affect Hong Kong’s GDP
and GNP?
Hong Kong’s GDP will be / not be affected.
Hong Kong’s GNP will be / not be affected.
The dividends are Hong Kong’s factor
income from / paid abroad, so Hong
Kong’s GNP will increase / decrease.
Take this challenge 2
Q A Filipino maid has worked in Hong Kong for two years.
Is her salary included in Hong Kong’s GDP or GNP?
She is / is not a Hong Kong resident.
Her salary is / is not included in Hong
Kong’s GDP.
Her salary is / is not included in Hong
Kong’s GNP.
Take this challenge 3
Q In what situation will GDP be larger than GNP?
factor income
factor income
GNP = GDP + ( from abroad - paid abroad )
If factor income from abroad is larger / smaller than the
factor income paid abroad, GNP will be smaller than GDP.