Economics Gdp Questions
The difference between GDP and GNP deflator lies in the variables they measure and the perspective they adopt.
Gross Domestic Product (GDP) is a measure of the total value of all final goods and services produced within a country's borders during a specific time period. It focuses on the economic activity that occurs within a country, regardless of whether the production is done by domestic or foreign entities. GDP reflects the overall economic performance of a country.
On the other hand, the Gross National Product (GNP) deflator measures the average price change of all goods and services produced by the residents of a country, regardless of their location. GNP takes into account the income earned by a country's residents, both domestically and abroad. It includes the value of goods and services produced by domestic entities operating abroad and excludes the value of goods and services produced by foreign entities within the country.
In summary, GDP measures the value of goods and services produced within a country's borders, while GNP deflator measures the average price change of goods and services produced by a country's residents, regardless of their location.