Text what is gnp?
In every country - from Poland to Peru and from New Zealand to Nigeria—the production of goods and services provides the food, clothing, and shelter that allow its people to survive and prosper. Some countries produce an abundance of raw materials such as coal and timber while others produce manufactured goods like steel and automobiles. Some countries may concentrate on producing foodstuffs like rice and butter while others produce services—movies, insurance, or banking. Whatever is not consumed in the country itself can be sold to other countries as exports.
The size of a country's economy is determined by the total amount of goods and services that country produces. As more and more goods and services are produced, the economy grows—and the best way to measure this growth is to put a monetary value on everything bought or sold.
Although money is not the only measure of an economy’s size, it is the easiest way to sum up the value of all the apples and oranges, automobiles and computers, football games and college classes that a country produces in the course of a given year. The monetary value of all these goods and services can then be added up and compared with that of other countries. Since almost every country uses a different currency, the totals from each country have to be translated—by using currency exchange rates—to compare the size of one country's economy to another. For example, the yen value of the Japanese economy can be converted into U.S. dollars to34
compare it to the American economy.
The measure of economic activity that includes all the goods and services bought or sold in a country over the course of a year is called gross domestic product (GDP).GDP measures a country's economic activity, just as a speedometer is used to measure the speed of a car. When a country produces more goods and services, its economic activity speeds up. In other words, the GDP increases. A healthy economy grows steadily, over a period of months or years. When growth stops or slows down, the economy is said to be in a "recession."When the international activities of a country's residents are added to GDP, a wider more global measure of a country's total economic activity is created: gross national product or GNP. Both measures tell more or less the same story—GDP concentrates on the purely "domestic" production of goods and services covering only the economic activity which takes place within the country's borders, while GNP includes net international trade and investment, which includes everything from exports of movies and compact disks to foreign earnings and travel abroad.GDP and GNP try to measure every legal good and service that an economy produces. A farmer selling fresh vegetables, an automobile dealer selling user cars, a poet selling a new book, a hairdresser, prize fighter, or lifeguard selling his goods and services all contribute to economic activity, as measured by GDP and GNP. At each stage of production, every time that monetary value is added, a country’s GDP and GNP is increased. (2500)