Exam Reviewer #4

GDP - Gross Domestic Product

Meaning: The total value of all final goods and services produced within a country during a specific period, regardless of who produces them.

Explanation: GDP measures the economic activity inside the country's borders. It includes production by both local and foreign businesses operating in the country, but it excludes income earned by citizens abroad. GDP helps assess the size, growth, and health of a country's economy.

Example: A forcign-owned factory in the Philippines produces cars. The value ofthese cars counts in the Philippines' GDP, even though the company is foreign.

GNP - Gross National Product

Meaning: The total value of all final goods and services produced by a country's citizens in a given period, whether produced domestically or abroad.

Explanation: GNP measures the economic output of a nation's citizens and businesses, no matter where they are located. It includes income earned by citizens working or investing abroad but excludes income earned by foreigners within the country. GNP reflects the overall economic contribution of a nation's people.

Example: A Filipino engineer works in the United States. His salary counts in the Philippines' GNP but not in its GDP.