TOPIC: GDP AND GNP

THIS TOPIC’S OUTLINE:

1. Define and distinguish between GDP and

GNP
2. Calculate GDP, GNP from data
 1. GDP - GNP

Ø GDP (Gross Domestic Product): the value of all

the final goods and services that are made in an
economy in a particular time period

Ø GNP (Gross National Product): the value of all

final goods and services made by a
country's residents and businesses, regardless of
production location.
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 Distinguish between GDP and GNP

Ø Similarity:

ØDissimilarity:

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• Example: A Vietnamese company has a branch
in Russia. This branch has business
performance in 2007 like that:
- Revenue: $2 billion
- Profit: $350 million
- This branch transfers to Vietnam: $180 million

Question:
Which number can calculate in GDP of Russia?
Which number can calculate in GDP of Vietnam?
Which number can calculate in GNP of Russia?
Which number can calculate in GNP of Vietnam?
Chöông 2 5
 4. Calculate GDP, GNP from data
GDP is the sum of:
• Consumption(C) by households
• Investment (I) by firms
• Government expenditure (G)
• Net exports (NX)

=> GDP = C + I + G + X – M
 4. Calculate GDP, GNP from data
GNP = GDP + NIA

NIA (Net property income from abroad) = income

earned from assets abroad – income paid to foreign
assets operating domestically
 Nominal GDP and Real GDP

2015 2016 2017

P Q P Q P Q

Rice 1.200 10 1.500 10 2.200 20

Paper 5.000 5 7.000 5 10.000 10

Computer 200.000 2 220.000 2 250.000 4

GDPdn 437.000 490.000 1.144.000

GDP thực 437.000 437.000 874.000

Real GDP means GDP has been adjusted for inflation

 Annual Real GDP growth rate

This indicator is measured in growth rates

compared to previous year

GDPt – GDPt-1
V (t) = * 100
GDPt-1

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v < 0 or v= 0 : growth is very weak
0 < v < 2 or v = 2: growth is weak
2< v <4 or v = 4: growth is average
4 <v <6 or v = 6: growth is average - good
6 <v <8 or v = 8: growth is very good
8 <v <10 or v = 10: growth is strong
v > 10 : growth is very strong

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 Discussion

1. v > 10: growth is very strong. Is it good or

bad for the economy?

2. Which real GDP growth rate does the

developing country often have?

3. Which real GDP growth rate does the

developed country often have?
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 Discussion
• In 2016,
- Real GDP growth rate of the United State
was 2,4%
- Real GDP growth rate of Vietnam was
6,2%
ÞExplain

(GDP of the United State was 18.561.930 billion USD

GDP of Vietnam was 207 billion USD)
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