Question

Compare and contrast the GDP and GNP values of the United States and Canada. GDP and GNP figures are very similar for the United States. Reason for this??? Which one of the two figures would be higher for Canada? Why? Explain?

Answer 1

According to the World bank, the GDP and GNP of US are 19.39 lakh crores USD and 19.61 lakh crores PPP dollars respectively.

The GDP and GNP of Canada are 1.65 lakh crores USD and 1.68 lakh crores PPP dollars respectively.

The GDP and GNP of US are almost twelve times that of GDP and GNP of Canada.

GDP gives the market value of all final goods and services produced within the geographical boundaries of a country while GNP gives the total income earned by all the nationals of a country. GDP limits income calculation to geographical boundaries and includes foreign nationals. GNP includes nationals only and considers income by nationals from all over the world. GNP being higher indicates that the US nationals all over the world are earning more income in other parts of the world than the amount of income being produced by US.

For Canada also we see that GNP figure is higher than GDP. However, the difference between the two figures is very less compared to that of USA indicating that US nationals are earning more than the domestically produced income in US than in Canada.