The Gross National Product (GNP) is the value of all the goods and services produced in an economy, plus

the
value of the goods and services imported, less the goods and services exported.
http://economics.about.com/cs/economicsglossary/g/gross_national.htm

Gross National Product. GNP is the total value of all final goods and services produced within a nation in a
particular year, plus income earned by its citizens (including income of those located abroad), minus
income of non-residents located in that country. Basically, GNP measures the value of goods and services
that the country's citizens produced regardless of their location. GNP is one measure of
the economic condition of a country, under the assumption that a higher GNP leads to a higher quality of
living, all other things being equal.
Read more: http://www.investorwords.com/2186/GNP.html
GDP is Gross domestic product. For a region, the GDP is "the market value of all the goods and services
produced by labor and property located in" the region, usually a country. It equals GNP minus the net inflow of
labor and property incomes from abroad.
http://economics.about.com/cs/economicsglossary/g/gross_national.htm

Gross national product (GNP), total market value of the final goods and services produced by a
nations economy during a specific period of time (usually a year), computed before allowance is
made for the depreciation or consumption of capital used in the process of production. It is
distinguished from net national product, which is computed after such an allowance is made. The
GNP is nearly identical to gross domestic product (GDP) except that the latter does not include the
income accruing to a nations residents from investments abroad (minus the income earned in the
domestic economy accruing to nonnationals from abroad). Gross national product is a convenient
indicator of the level of a nations economic activity. In 1991 theUnited States substituted GDP for
GNP as its main measure of economic output.
https://www.britannica.com/topic/gross-national-product

The amount of private business capital which is invested in domestic production either through the purchase of fixed
property or inventory. These expenditures account for approximately 15% to 18% of the gross domestic product
(GDP) in the US.
Read more: http://www.businessdictionary.com/definition/gross-private-domestic-investment-GPDI.html
Gross private domestic investment is the official government measure ofinvestment
expenditures undertaken by the business sector. It seeks to quantify that portion of gross domestic
product that is purchased by the business sector and which is used, in theory at least, for investment and

the acquisition of capital goods. These expenditures purchase a wide range of capital goods, from factories
to socket wrenches, from delivery trucks to nuclear power plants, from office buildings to copy machines.

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s=wpd&c=dsp&k=gross+private+domestic+investment

Additions of capital stock in a country that does not include deductions for depreciation of capital that may
have been produced previously.
Read more: http://www.investorwords.com/16460/gross_domestic_investment.html

http://study.com/academy/lesson/gross-private-domestic-investment-definition-formula-quiz.html

GOVERNMENT EXPENDITURES:
Spending by the government sector including both the purchase of final goods and services, or gross
domestic product, and transfer payments. Government expenditures are used by the government sector
to undertake key functions, such as national defense and education. These expenditures are financed with
a combination of taxes and borrowing.
Government expenditures are used either to purchase a portion of gross domestic product (government
purchases) or as gifts to members of the other sectors (transfer payments). Both types of expenditures
have an impact on the macroeconomy. They can trigger business-cycle instability or be used to address
the unemployment and inflation problems of this instability.

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What are 'Net Exports'

Net exports refer to the value of a country's total exports minus the value of its total imports. It is used to
calculate a country's aggregate expenditures, or GDP, in an open economy. In other words, net exports
equals the amount by which foreign spending on a home country's goods and services exceeds the home
country's spending on foreign goods and services.

http://www.investopedia.com/terms/n/netexports.asp
WHAT IT IS:

Net exports are the difference between a country's total value of exports and total value of imports.
Depending on whether a country imports more goods or exports more goods, net exports can be a
positive or negative value.
HOW IT WORKS (EXAMPLE):

Net exports are measured by comparing the value of the goods imported over a specific time period
to the value of similar goods exported during that period. The formula for net exports is:
Net Exports = Value of Exports - Value of Imports
For example, let's suppose Canada purchased $3 billion of gasoline from other countries last year,
but it also sold $7 billion of gasoline to other countries last year. Using the formula above, Canada's
net gasoline exports are:
Net Exports = $7 billion - $3 billion = $4 billion
WHY IT MATTERS:

Net exports is an important variable used in the calculation of a country's GDP. When the value of
goods exported is higher than the value of goods imported, the country is said to have a positive
balance of trade for the period. When taken as a whole, this in turn can be an indicator of a
country's savings rate, future exchange rates, and to some degree its self-sufficiency
(though economists constantly debate the idea).
http://www.investinganswers.com/financial-dictionary/economics/net-exports-2424

DIFFERENCE

Gross Domestic Product (GDP) and Gross National Product (GNP) both try to measure the market
value of all goods and services produced for final sale in an economy. The difference is how each term
interprets what constitutes the economy. GDP refers to and measures the domestic levels of production,
whereas GNP measures the levels of production of any person or corporation of a country. For example,
the American GNP measures the production levels of any American or American-owned entity, regardless
of where the actual production process is taking place, and defines the economy in terms of the citizens.
GNP is less commonly referred to than GDP, but is best described as the measure of national output.
http://www.investopedia.com/ask/answers/030415/what-functional-difference-between-gdp-and-gnp.asp

Gross
Domestic
Product

Gross National Product

Definition An estimated value of the total worth

An estimated value of the total worth

of a countrys production and

services, within its boundary, by its
nationals and foreigners, calculated
over the course on one year.

of production and services, by

citizens of a country, on its land or
on foreign land, calculated over the
course on one year.

http://www.diffen.com/difference/GDP_vs_GNP

Key Differences Between GDP and GNP

The major differences between GDP and GNP are explained in the below given points:
1.

The monetary value of all the goods and services produced within the geographical
limits of the country is known as GDP. GNP is the money value of all the goods and services
made by the citizens of the country, no matter where they dwell.

2.

GDP gauges production of products within the countrys boundary. Conversely, GNP
measures the production of products by the companies and industries owned by the residents
of the country.

3.

The basis for calculating the GDP is the location, whereas GNP is based on citizenship.

4.

In case of GDP, the measurement of productivity is done on a local scale while if we talk
about GNP it measures the productivity on an international scale.

5.

GDP focuses on measuring domestic production, but GNP focuses on production by the
nationals, i.e., individuals or corporations, of the country.

6.

GDP outlines the strength of the domestic economy of a country. On the other hand,
GNP outlines how the residents are contributing towards the economy of the country.

Read more: http://keydifferences.com/difference-between-gdp-and-gnp.html

As per the definition, Variables that are measured at a point of time are called stockvariables whereas
variables measured over a period of time are flow variables.
This means that stocks are non recurring in nature whereas flows are recurring in nature.

Flows can be calculated on hourly,weekly,monthly or yearly basis but they should be measurable only
over a period of time.
For eg : Cash in hand is a stock whereas your monthly income is a flow.
Cash in hand can be calculated at a particular point of time i.e on 23rd December 2015I have 1000 in
my pocket whereas your monthly income which is recurring in nature is a flow concept as one can tell that
I earn 1 lakh a month so it's over a period of one month that he/she earns 1 lakh.
Thus income,savings,expenditures,profits are all flows whereas money, wealth, inventories, population
are all stocks
https://www.quora.com/How-do-I-distinguish-between-stock-and-flow-variables

(a) Flow Variables:

A flow is a quantity which is measured with reference to a period of
time.Thus, flows are defined with reference to a specific period (length of time),
e.g., hours, days, weeks, months or years. It has time dimension. National income
is a flow. It describes and measures flow of goods and services which become
available to a country during a year.
Similarly, all other economic variables which have time dimension, i.e., whose
magnitude can be measured over a period of time are called flow variables. For
instance, income of a person is a flow which is earned during a week or a month
or any other period. Likewise, investment (i.e., addition to the stock of capital) is
a flow as it pertains to a period of time.
Other examples of flows are: expenditure, savings, depreciation, interest, exports,
imports, change in inventories (not mere inventories), change in money supply,
lending, borrowing, rent, profit, etc. because magnitude (size) of all these are
measured over a period of time.
(b) Stock Variables:
A stock is a quantity which is measurable at a particular point of time,
e.g., 4 p.m., 1st January, Monday, 2010, etc. Capital is a stock variable. On a
particular date (say, 1st April, 2011), a country owns and commands stock of

machines, buildings, accessories, raw materials, etc. It is stock of capital. Like a

balance-sheet, a stock has a reference to a particular date on which it shows stock
position. Clearly, a stock has no time dimension (length of time) as against a flow
which has time dimension.
A flow shows change during a period of time whereas a stock indicates the
quantity of a variable at a point of time. Thus, wealth is a stock since it can be
measured at a point of time, but income is a flow because it can be measured over
a period of time. Examples of stocks are: wealth, foreign debts, loan, inventories
(not change in inventories), opening stock, money supply (amount of money),
population, etc.
The distinction between flows and stocks can be easily understood by comparing
the actions of Still Camera (which records position at a point of time) with that of
Video Camera (which records position during a period of time).
http://www.economicsdiscussion.net/difference-between/difference-between-flow-variables-and-stockvariables/555

STOCKS AND FLOWS

FLOWS

Income : the goods and services produced each year

Deficits: The excess of spending over income each year

Investment: Goods produced to be used in production each year

Surpluses: The excess of revenue over expenditures each year.

STOCKS

Wealth: All the goods a person owns. Wealth is the sum of past net saving.

Debt: the sum of all past deficits less all past surpluses

Capital: All the investment goods owned. Capital is the sum of past net investment

Final Goods:
Final goods refer to those goods which are used either for consumption or for investment.
Final Goods include:
(i) Goods purchased by consumer households as they are meant for final consumption
(like milk purchased by households).
(ii) Goods purchased by firms for capital formation or investment (like machinery
purchased by a firm).
It must be noted that final goods are neither resold nor used for any further transformation
in the process of production.

Intermediate Goods:
Intermediate goods refer to those goods which are used either for resale or for further
production in the same year.
Intermediate Goods include:
(i) Goods purchased for resale (like milk purchased by a Dairy Shop).
(ii) Goods used for further production (like milk used for making sweets).
http://www.yourarticlelibrary.com/macro-economics/final-goods-and-intermediate-goods/30275/

Final Goods Vs Intermediate Goods:

Basis

Final Goods

Intermediate
Goods

Meaning:

Final goods refer Intermediate

to those goods

goods refer to

which are used those goods

either for

which are used

consumption or either for resale

for investment.

or for further
production in the
same year.

Nature:

They are

They are neither

included in both included in

Demand:

national and

national income

domestic

nor in domestic

income.

income.

They have a

They have a

direct demand as derived demand

they satisfy the

as their demand

wants directly.

depends on the
demand for final
goods.

Value addition: They are ready They are not

for use by their

ready for use,

final users i.e. no i.e. some value

value has to be has to be added
added to the final to the
goods.

intermediate
goods.

Production

They have

They are still

Boundary:

crossed the

within the

production

production

boundary.

boundary.