is the total value of final goods and services produced in a year by a country's nationals (including profits from capital held abroad).

GNP= GDP + NET FACTOR INCOME FROM ABROAD

Income of Filipinos in abroad less the income of foreigners in the Philippines

Are goods that are ultimately consumed rather than used in the production of another good. For example, a car sold to a consumer is a final good; the components such as tires sold to the car manufacturer are not; they are intermediate goods used to make the final goods. The same tires, if sold to a consumer, would be a final goods.

Only final goods are included when measuring national income. If intermediate goods were included too, this would lead to double counting; for example, the value of the tires would be counted once when they are sold to the car manufacturer, and again when the car is sold to the consumer

Only newly produced goods are counted. Transactions in existing goods, such as second-hand cars, are not included, as these do not involve the production of new goods.

is counted as part of GNP according to who owns the factors of production rather than where the production takes place. For example, in the case of a German-owned car factory operating in the US, the profits from the factory would be counted as part of German GNP rather than US GNP because the capital used in production (the factory, machinery, etc.) is German owned. The wages of the American workers would be part of US GNP, while the wages of any German workers on the site would be part of German GNP.

Looks at how the goods and services were used.

In this approach, the measurement is done as GNP was originally defined. The focus is in the spending on final goods or final demand. That’s why it is also called the demand side of measuring GNP.

Y = C + I + G + (X – M)

(C) – private consumption of goods and services

(I) – investment goods(G) – Government consumption of goods

and services(X) – net exports/exports minus imports

(M) (X-M)

Consumption goods and services are purchases of those items which directly and immediately satisfy people’s wants.

We defined investment as We defined investment as spending on goods that used to spending on goods that used to produce other goods and produce other goods and services.services.

Salaries and wages of public school Salaries and wages of public school teachers, police and other public teachers, police and other public servants.servants.

Government expendituresGovernment expenditures

A country may buy goods and services from other countries (imports) or sell merchandise and services to them (exports)

Uses the value contributed by each industry in the production of the final good

Called the A-I-S method of arriving GDP. A (Agriculture), I (Industry), S (Services) Represents the output of stage of

production

Focuses on how the factors of production were rewarded

Also called as “factor approach”, because it corresponds to the sum of the rewards to the owners of the factors of production in National Income.

Income of natural persons Entrepreneurship Capital Depreciation (current usage of long

lasting assets) Subsidies of government to either

government-owned corporations or to households.

Indirect Taxes (taxes paid on intermediate goods)

Goods that are still being processed in order to create final good

Usually used as an alternative to GNP, since it does not include payments from factor owners abroad.

defined as the market value of all final goods and services produced within a country in a given period of time.

"Gross" means depreciation of capital stock included.

GDP = private consumption + government + investment + net exports