What is gdp for the economy 3 why are only final

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: of pens is $4 each, the price of shirts is $30 each, and the price of radios is $35 each. What is GDP for the economy? 3. Why are only final goods and services computed in GDP? 292 Chapter 11 Measuring Economic Performance national income, or GNI, instead of gross national product, GNP.) What is the difference between GDP and GNP? GNP measures the total market value of final goods and services produced by U.S. citizens, no matter where in the world they reside. GDP, in contrast, is the total market value of final goods and services produced within the borders of the United States, no matter who produces them. Suppose a U.S. citizen owns a business in Japan. The value of the output she is producing in Japan is counted in GNP because she is a U.S. citizen, but it is not counted in GDP because it was not produced within the borders of the United States. Now suppose a Canadian citizen is producing goods in the United States. The value of his output is not counted in GNP because he is not a U.S. citizen, bu...
View Full Document

Ask a homework question - tutors are online