Sociology and Economics

Presented By:
R Saizampuia 16/arch/006
Vanrohlua 16/arch/002
 Gross National Product (GNP)

• WHAT IS GNP?
• Gross national product (GNP) is a broad
measure of a nation's total economic activity.
• GNP is the value of all finished goods and
services produced in a country in one year by
its nationals.
 HOW IT IS CALCULATED
• GNP includes income earned by citizens and
companies abroad, but does not include
income earned by foreigners within the
country.
 HOW IT IS CALCULATED
• The figures used to assess GNP include the
manufacturing of tangible goods  
Eg :-(cars, furniture and agricultural products)
•  The provision of services
Eg :- (education, healthcare, and business
services).
• GNP does not include the services used to
produce manufactured goods because their
value is included in the price of the finished
product.
• However, GNP does include depreciation and
indirect business taxes like sales tax.
 The formula for GNP

• Consumption + Government Expenditures

+ Investments + Exports + Foreign Production
by U.S. Companies – Domestic Production by
Foreign Companies = Gross National Product
 USES
• GNP can be adjusted to make valid
comparisons year-to-year or among countries
•  GNP needs to be adjusted for inflation
• For country-to-country comparisons, GNP
needs to be stated on a per capita basis
(i.e. GNP divided by the population of the
country).
 The difference between GNP AND GDP
• GNP includes the value of products made by a
country's citizens and companies abroad
• While GDP only accounts for products made
within a country's borders.
• GNP excludes the value of products made by
foreign companies within the reporting
country.
 WHY IT MATTERS

• Due to the increasingly global nature of

national economies
• the interdependence of labor forces
• supply chains andsales channels

• The larger the difference between a country's

GNP and GDP, the more a country is involved
in international trade, finance and production.
 Gross Domestic Product (GDP)

• Gross Domestic Product (GDP) is a monetary

measure of the market value of all the final
goods and services produced in a period of
time, often annually or quarterly. Nominal
GDP estimates are commonly used to
determine the economic performance of a
whole country or region, and to make
international comparisons.
• GDP (nominal) per capita does not, however,
reflect differences in the cost of living and the
inflation rates of the countries; therefore using
a basis of GDP per capita at purchasing power
parity (PPP) is arguably more useful when
comparing differences in living standards
between nations.
• The OECD defines GDP as "an aggregate
measure of production equal to the sum of
the gross values added of all resident and
institutional units engaged in production
(plus any taxes, and minus any subsidies,
on products not included in the value of
their outputs). An IMF publication states
that "GDP measures the monetary value of
final goods and services—that are bought
by the final user—produced in a country in
a given period of time (say a quarter or a
year).
Total GDP can also be broken down into the contribution of
each industry or sector of the economy. The ratio of GDP to
the total population of the region is the per capita GDP and
the same is called Mean Standard of Living. GDP is
considered the "world's most powerful statistical indicator of
national development and progress".
 Calculation
• The GDP calculation, therefore, also accounts
for spending on exports and imports. Thus, a
country's GDP is a measure of consumer
spending (C) plus business investment (I) and
government spending (G) as well as its net
exports, which is exports minus imports (X-M).
• The Gross Domestic Product (GDP) in India was worth
2597.49 billion US dollars in 2017. The GDP value of India
represents 4.19 percent of the world economy. GDP in India
averaged 545.81 USD Billion from 1960 until 2017, reaching
an all time high of 2597.49 USD Billion in 2017 and a record
low of 36.54 USD Billion in 1960.