8.3 Calculations based on national income accounting

Question 1

Define GDP

Answer 1

The market value of all final goods and services produced in a country over a time period.

Question 2

Define GNI

Answer 2

The total income received by the residents of a country, equal to the value of all final goods and services produced by factors of production supplied by the country’s residents regardless where the factors are located.

Question 3

Outline how GDP and GNI differ

Answer 3

GDP is the total value of all final goods and services produced within a country over time period, regardless of who owns the FOPs.

GNI is the total income received by the residents of a country, equal to the value of all final goods and services produced by the FOPs supplied by the country’s residents regardless of where the factors are located.

Question 4

How to find GNI

Answer 4

Add net income from abroad to GDP