What is the difference between GDP and GNP deflator basket of goods?

The difference between GDP and GNP deflator basket of goods lies in the scope of measurement and the components included.

GDP (Gross Domestic Product) measures the total value of all final goods and services produced within a country's borders during a specific time period. It focuses on the production that occurs within the country, regardless of whether the production is done by domestic or foreign entities. GDP includes consumption, investment, government spending, and net exports.

On the other hand, GNP (Gross National Product) measures the total value of all final goods and services produced by the residents of a country, regardless of their location, during a specific time period. It includes the production done by both domestic and foreign entities owned by residents of the country. GNP includes consumption, investment, government spending, net exports, and net income from abroad.

The deflator basket of goods, also known as the GDP deflator or GNP deflator, is a price index that measures the average change in prices of all goods and services included in GDP or GNP over time. It is used to adjust the nominal GDP or GNP figures to real GDP or GNP figures, which account for inflation or deflation.

In summary, GDP measures the value of production within a country's borders, while GNP measures the value of production by residents of a country regardless of location. The deflator basket of goods is a price index used to adjust GDP or GNP figures for inflation or deflation.