Gross National Product (GNP)

Question 1

What is the Gross National Product?

Answer 1

Measure of the dollar value of final goods and services produced by the economy over a given period time (usually a year).

Question 2

What does Final Goods and Services refer to?

Answer 2

The final goods\services sold to their ultimate users.

For example, if a company sells a bulk of phones to Wal-Mart, Wal-Mart is not the final user–an individual who pays to use the phone is the inal user.

Question 3

What are intermediate goods and services?

Answer 3

Goods\services purchased by firms for resale.

Question 4

What is the equation to measure GNP?

Answer 4

Value-Added (VA) = Cost of goods sold - cost of intermediate goods purchased