Movements in GDP

Question

Movements in GDP

Quizplus · Accepted Answer

GDP and GNP are closely related measures of the economic output of a country, with the primary difference being that GNP includes the income earned by a country's citizens and businesses abroad, while GDP focuses only on economic activity within the borders of the country. As such, movements in GDP tend to closely track movements in GNP, with some variation based on international trade and investment flows. However, both measures are subject to fluctuations and changes based on a variety of economic factors, including consumer spending, investment, government spending, and international trade. It is important to note that both measures must be adjusted for inflation in order to accurately compare economic activity over time.