What is the difference between GDP and GNP deflator price index?

The difference between GDP and GNP deflator price index 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 domestic production regardless of the nationality of the producers. 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. GNP includes the income earned by the country's residents both domestically and abroad. It takes into account the nationality of the producers.

The deflator price index, whether it is GDP deflator or GNP deflator, is used to adjust the nominal GDP or GNP figures for inflation. It measures the average change in prices of all goods and services included in the respective GDP or GNP calculation over time. The deflator price index helps to provide a more accurate measure of real economic growth by removing the impact of price changes.

In summary, the main difference between GDP and GNP deflator price index is that GDP focuses on domestic production within a country's borders, while GNP includes the income earned by a country's residents both domestically and abroad. The deflator price index is used to adjust the nominal GDP or GNP figures for inflation.