Could you explain the similarities and differences between GDP and national income?
Would you define Gross Domestic Product and Gross National Product. Then answer the following question: Why would a Honda manufactured in Ohio be included in U.S. GDP, while a General Motors vehicle manufactured in Mexico would not?
Finally, please identify and describe the four components of GDP and answer the following question, please demonstrate how you arrived at your solution. If GDP is $100 billion, consumption is $60 billion, investment is $30 billion, and net exports are -$5 billion, what is government spending in this economy?
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Let's first look at the definition of GDP and GNP.
GDP is Gross Domestic Product and it is equal to the value of goods and services produced within an economy during a specific time period. E.g. Annual GDP is when the time period is one year and quarterly GDP is the value of goods and services produced within an economy during a quarter.
Now, GNP is Gross National Product and it is equal to the value of goods and services produced by nationals (citizens of a country) during a specific time period.
So you can see from the definitions that the difference is in who produced the goods and services. For example, if an American company is producing clothing in Canada then the ...
The similarities and differences between GDP and national income are posed.