Economics Made Economical

Economic Tip of the Day: August 26, 2012

An example of how GDP and GNP may differ: consider Apple, a U.S. corporation with a significant quantity of its production occuring outside American borders, primarily in China. Apple’s contribution to U.S. GDP would be relatively insignificant, while its contribution to China’s GDP would be massive. Conversely, Apple’s contribution to U.S. GNP would include 100% of the American company’s assets produced anywhere on Earth. Its contribution to Chinese GNP would be zero, since it is not a Chinese corporation.


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