Gross national product
Gross national product, or GNP, gives an indication of a country's economic health. It starts with gross domestic product (the value of finished goods and services produced within a country) then adds in money earned overseas and subtracts money earned by foreigners within the country.
GNP gives a broader picture of a country's economic activity than GDP, which is limited to the value of goods and services produced within a country's borders. GNP adds the value of goods and services produced in other countries by companies based in the home country. It excludes the value of goods and services that are produced within the home country by foreigners.
If an American works in France, his salary will be part of United States GNP. If a French person works in the U.S., her salary will be subtracted from U.S. GNP. The value of products that an American company produces at its Chinese factoriy is part of U.S. GNP, while the value of products a Japanese company produces at a factory in the U.S. is not part of U.S. GNP.
Recent Mentions on Fool.com
- Warren Buffett's Favorite Market Indicator Shows the Stock Market Is Overvalued
- The Stock Market Is Overvalued
- Buffett's Favorite Metric Shows the Stock Market is Not Cheap
- Africa: The Next Great Growth Story for Visa and MasterCard?
- How Microsoft and 3M Justified Their Place on the Dow
- Buffett's Favorite Metric Shows the Stock Market Today Is Expensive