(a) Gross Domestic Product(GDP): GDP is the aggregate of the final goods and services produced in the domestic territory of a country during an accounting year.
(b) Net Domestic Product ( NP): NDP refers to the market value of all final goods and services turned out in an economy during a given period of time after making allowance for depreciation charges. lt is obtained by subtracting depreciation from GDP. NDP = GDP – Depreciation.
In simple words we can say that NDP is the net market value of final goods and services produced by its residents and nonresidents within the domestic territory of a country in a year.
(c) Gross National Product (GNP): It is the most important concept in N.I accounting. It is a National concept. GNP is defined as the total market value of all final goods and services produced in a country in a year’s time.
No allowance for wear and tear cost i.e., depreciation is made. While calculating the GNP, the money value of only the goods and services which are finally consumed by the people are to be taken into account. Hence, the value of all intermediary goods and inputs are to be excluded in order to avoid double or multiple counting.
The income received from foreign investment and from other factor services rendered abroad should be added to the gross domestic product of a country. Similarly, the income generated by the foreigner in a given country should be deducted from the GDP for the purpose of computing the GNP.
GNP = GDP + X – M
X= income earned by nationals abroad .
M= Income earned by foreigners in the given country.
GNP includes:
- The value of all consumption goods which are currently produced.
- The value of all capital goods currently produced.
- Total government expenditure on buying various goods and services.
- Net export value.
- Net amount earned abroad.
GNP = (C+I+G) + (X-M) + (R-P)
(d) Net National Product (NNP): Net national product is the market value of the net output of final goods and services produced by the country during the relevant income period.
NNP = GNP – Depreciation.
