Question

What is the difference between GNP at market prices and GNP at factor cost?

Answer 1

Gross national product includes the overall amount of products and services produced by or outside the country. The people. Gross national product on the economy, price is the combined money value of all the final goods and services generated annually in a country plus net foreign factor profits. In other words, GNP means the overall profits received from all internal and external territories at market level. Therefore the definition of GNP is larger and more systematic than GDP. Thus Gross national product at market price = Gross domestic product at market price + Net factor income from abroad.

Gross National Product at factor level is determined by applying total factor sales from overseas to the production expense gross domestic product. Gross domestic product at factor expense is the sum which includes the input, expense and depreciation of both the net domestic product. Accordingly, GNP at factor cost = Gross domestic product at factor cost + Net factir income