Gross national product

The gross national product is the aggregate volume of final services and goods produced during the year. It is expressed in money.

Determining the gross national product, it is necessary to pay attention to the individual components of this definition. So, first of all the indicator represents a set of final services and products. Thus, it is assumed that there are both "intermediate" and "non-finite" goods that are not taken into account. The final product is the one that is purchased for end use. Intermediate is the one that is acquired for subsequent resale or processing. In this regard, the gross national product is calculated using the final product.

At the same time, the indicator does not include the value of goods produced in the home domestic economy, in the shadow economy (despite the fact that it is manufactured for sale).

Gross national product is calculated in value form. As an accurate indicator of the dynamics of economic development, the natural material form can not speak. For example, during the year three tables and five suits were produced. The cost of the table is forty dollars, and the costume is twenty. And next year five tables and three suits were produced. If you calculate GNP in real physical form, it will be the same for both years and equal to eight units. When calculating in cash, in the second year the indicator will be greater than the first.

It should be noted that GNP reflects only a general idea of the dynamics of economic development , the economic state of the state as a whole. At the same time, the potential of different countries can be compared. You can determine welfare by comparing the indicator with the number of people living. Thus, the per capita income is calculated.

The calculation of the indicator can be carried out by summing up all the costs incurred by consumers in the process of purchasing final services and goods for a given year. This method is called the calculation of "costs" or "production".

The indicator can be determined by summing up all incomes received by the producers of services and goods for a given year.

With an accurate calculation of the gross national product, the same result should be obtained in connection with the fact that what is spent to purchase services or goods is the profit of their producers.

In accordance with the growth rates of the indicator, the dynamics of economic development is estimated. So, for example, if it increased by five percent, then the volume of produced goods in the society increased as much. The more services and goods, the higher, respectively, and GNP.

However, it should be noted that an increase in the indicator may not always indicate an increase in the physical volume of output. Situations in which there is an increase in value with decreasing volumes are not uncommon in the economy. Calculation of GNP is carried out in value form. It, in turn, depends directly on the level of emerging prices. The situation in which the growth of the indicator occurs, despite a decrease in the production volume, can take place provided that prices increase faster than the production of goods.

When calculating the gross national product in current prices, there may be a misconception about the economic state and living standard in the country. In order to make the picture of production dynamics clearer, inflation should be excluded when determining the indicator. In this regard, the nominal and real GNP are calculated. Nominal provides for the definition of the indicator in the prices that are formed at the moment. The calculation of real GNP is carried out at constant prices.