How GNP is calculated

There are various ways of calculating GNP numbers. The expenditure approach determines aggregate demand, or Gross National Expenditure, by summing consumption, investment, government expenditure and net exports. The income approach and the closely related output approach sum wages, rents, [[interest, profits, non income charges, and net foreign factor income earned.


The three methods yield the same result because total expenditures on goods and services (GNE) is equal to the value of goods and services produced (GNP) which is equal to the total income paid to the factors that produced the goods and services (GNI)

Expenditure Approach to calculating GNP:GNP = GDP + NR (Net income from assets abroad (Net Income Receipts))



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