Gross National Product (GNP):
1. Gross National Product refers to gross money value of all final goods and services produced in an economy during a year. It includes net income from abroad.
2. Depreciation cost of capital assets are included.
3. GNP = C + I + G + (X-M) + (R-P)Or GNP = NNP + Depreciation
4. GNP value does not give us a true picture of the net increase in the production of the economy.
5. It is a wider concept. It includes NNP. 6. GNP will be greater than NNP.
Net National Product (NNP)
1. Net National Product refers to the net money value of all goods and services produced in an economy during a year. It includes net income from abroad.
2. Depreciation cost of capital assets are not included.
3. NNP = GNP – Depreciation Or NNP = C + I + G + (X-M) + (R – P) – Depreciation .
4. NNP is a better measure of National Income. It is a better index of judging the progress of the economy at any time.
5. It is narrow concept. It is a part of GNP. 6. NNP will be less than GNP.
