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Gross Domestic Product (GDP) – the money value of all (final) goods and
services produced within the country but excluding net income from abroad.
? Gross National Product (GNP) – The money value of all (final) goods and
services produced by the nationals of a country during a year both within
and outside the country.
? GDP + (Net Income from abroad) = GNP
In most developing countries/economies GNP is lower than GDP because
the net Income from abroad is usually very low and particularly negative.
We have for instance very few Kenyans who have invested in other
(developed) countries compared to the large volumes of foreign direct
investment (FDI) in the country.
? GNP = GDP +[Production - Production by foreigners
by nationals abroad (c) within a developing country (F)]
? GNP = GDP + (C – F); Since (c) is very small compared to (F) then the
negative effect (reducing effect) on GDP is high. The negative net Income
from abroad drastically reduces GNP since GNP = GDP + [-(C – F)].
Gregorymasila1 answered the question on March 2, 2018 at 18:05
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