Measures of Development

What is the primary difference between Gross National Product (GNP) and Gross Domestic Product (GDP)?

• GNP measures production within a country's borders, while GDP measures production by its citizens globally.

• GNP focuses on the total income earned, while GDP focuses on the total value of goods and services.

• GNP measures the economic output of a country's citizens regardless of location, while GDP measures economic output within a country's geographic area.

• GNP includes foreign direct investment, while GDP does not.

Why is Gross National Income (GNI) considered a better measure for assessing the economic standing of developing countries compared to GDP?

• GNI only includes income from domestic production, making it simpler to calculate.

• GNI accounts for the total income earned by a country's businesses and labor force, including foreign investment.

• GNI provides a more accurate picture of individual wealth distribution within a country.

• GNI focuses solely on the value of goods produced, not services.

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