GDP stands for Gross Domestic Product, the total worth estimated in currency

values of a nation’s production in a given year, including service sector,

research, and development. That translates to a sum of all industrial production,
work, sales, businessand service sector activity in the country. Usually this is
calculated over a period of one year, but there may be analysis of short and long
term trends to be used for economic forecast. Gross Domestic Product can also
be calculated on a per capita (or per person) basis to give a relative example of
the economic development of nations.

GNP Definition
GNP stands for Gross National Product. In general terms, GNP means the
total of all business production and service sector industry in a country plus its
gain on overseas investment. In some cases GNP will also be calculated by
subtracting the capital gains of foreign nationals or companies earned
domestically. Through GNP an accurate portrait of a nation’s yearly economy
can be analyzed and studied for trends since GNP calculates the total income of
all the nationals of a country. This gives a far more realistic picture than the
income of foreign nationals in the country as it is more reliable and permanent
in nature. Gross National Product can also be calculated on a per capita basis to
demonstrate the consumer buying power of an individual from a particular
country, and an estimate of average wealth, wages, and ownership distribution
in a society.
Here is a video of economist Phil Holden explaining the difference between GNP
and GDP and talking about how they are measured and how accurate they are.

Calculation

How GDP is calculated

GDP of a country is defined as the total market value of all final goods and
services produced within a country in a given period of time (usually a calendar
year). It is also considered the sum of value added at every stage of production
(the intermediate stages) of all final goods and services produced within a
country in a given period of time.
The most common approach to measuring and understanding GDP is the
expenditure method:
GDP = consumption + investment + (government spending) + (exports –
imports), or,
GDP = C + I + G + (X-M)

How GNP is calculated

There are various ways of calculating GNP numbers. The expenditure
approach determines aggregate demand, or Gross National Expenditure, by
summing consumption, investment, government expenditure and net exports.
The income approach and the closely related output approach sum wages,
rents,interest, profits, non income charges, and net foreign factor income
earned. The three methods yield the same result because total expenditures on
goods and services (GNE) is equal to the value of goods and services produced
(GNP) which is equal to the total income paid to the factors that produced the
goods and services (GNI).
Expenditure Approach to calculating GNP:GNP = GDP + NR (Net income from
assets abroad (Net Income Receipts)).

Applications of GDP and GNP numbers

GDP and GNP figures are both calculated on a per capita basis to give a portrait
of a country's economic development. GDP (or Gross Domestic Product) may
be compared directly with GNP (or Gross National Product), to see the
relationship between a country's export business and local economy. A region's
GDP is one of the ways of measuring the size of its local economy whereas the
GNP measures the overall economic strength of a country. These figures can
also be used to analyze the distribution of wealth throughout a society, or the
average purchasing power of an individual in the country etc.
Increase in exports of a country will lead to increase in both GDP and GNP of
the country. Correspondingly, increase in imports will decrease GDP and GNP.
However, sometimes increase in exports might only lead to increase in GDP and
not GNP. The exact relationship will depend on the nationality status of the
company doing the export or import. E.g. if Microsoft Corporation has a 100%
owned subsidiary in India, and that office exports US$2 Billion worth of services
out of India, then US$2 Billion will be added to the GDP of India. However, it will
not be added to the GNP figure since the export is done by a US company and
not an Indian company.

Criticism
GDP is perhaps the most widely used metric to measure the health of
economies. But some economists have argued that GDP is a flawed metric
because it does not measure the economic well being of society. For example,
it's possible that GDP is going up but median income going down and poverty
rate increasing. GDP also does not measure environmental impact of growth,
nor sustainability. Other important metrics include health of the population,
infant mortality rates, and malnutrition rates, none of which are captured by
GDP.
Here's Nobel laureate Joseph Stiglitz offering a criticism of GDP. And at about
the 4:45 mark, he talks about the difference between GDP and GNP: