Happy Valentine’s day! I hope that each one of my readers will interrogate the effects of this day on both GDP and GNP.

What is Gross Domestic Product? What is Gross National Product? What is love?

Gross Domestic Product(GDP), is used to compute the total value of the goods&services produced in a country’s borders.

Gross National Product(GNP); the computation is similar, however, the location is not restricted as GDP. This implies that GNP will count the economic activities of expatriates and other citizens outside the country’s borders but GDP will not do it.

There are some ways of calculating both of them, the simplest ways;

GDP(Income aproach)=  Total National Income + Sales Taxes + Depreciation + Net Foreign Factor Income 

GNP= GDP + Net Income Inflow from Overseas – Net Income Outflow to Foreign Countries

The terminologies I used;

Total National Income= The entirety of all compensation, lease, intrigued, and profits.

Sales Taxes=  Buyer charges which are forced by the government on the goods&services.

Depreciation = Cost allocated to a tangible asset over its useful life.

Net Foreign Factor Income=  The distinction between the entire payment that a country’s citizens and companies produce in outside nations, versus the overall pay remote citizens and companies create within the residential nation.

When calculating the sum of the wage earned by a country’s inhabitants in their area, GNP gets to be a more dependable pointer than GDP. Within the globalized economy, people appreciate numerous openings to win a salary, both from household and outside sources. When measuring such wide information, GNP gives data that other efficiency measures don’t incorporate. In case inhabitants of a nation were restricted to residential sources of wage, GNP would be rise to GDP, and it would be less important to the government and policymakers!

Nestlé is a Swiss brand that has factories in Turkey. Nestlé’s Marketing branch has found a way to sell more chocolates on Valentine’s Day; Valentine’s Day chocolates are specifically made for those in very deep love! If you are really in love with your fiance, you must buy these!

Nestlé’s special chocolate which is produced in Turkey affects Turkey’s GDP.

Nestlé’s special chocolate which is produced in Turkey affects Switzerland’s GNP.

As I mentioned above, GNP has no limits.

A better economy means better days. If you want to increase GDP and GNP simultaneously, use products your nation provides(personally I do not). Thank you for reading my content.

SOURCES

https://zyatalay.medium.com/nedi%CC%87r-bu-gsmh-gsyi%CC%87h-2fbec7d705ac

https://www.masterclass.com/articles/economics-101

GDP formula – how to Calculate Gdp, guide and examples. (2021, January 31). Retrieved February 14, 2021, from https://corporatefinanceinstitute.com/resources/knowledge/economics/gdp-formula/

Gross national product – learn how to calculate gnp of a country. (2021, January 31). Retrieved February 14, 2021, from https://corporatefinanceinstitute.com/resources/knowledge/economics/gross-national-product-gnp/