Gross National Product

Gross National Product

Define of GNP

The Gross National Product (GNP) is the total sum of income received for all final products and services produced in a given county in a particular time, also referred to as Gross Domestic Product. The gross national product comprise of services such as health care and education, and the tangible goods such as autos, furniture, clothing, food and fuel. The gross national products (GNP) exclude provisions for depreciations and indirect businesses taxes as those of purchase and selling of property.

People living in third world countries are faced with high rates of illiteracy, low life expectancy and poor living standards. In Africa, for example Research indicates that a one third of its population has inadequate food consumption and only unsafe water is available for drinking (Ephantus, 2004). In these third world countries it has become difficult and almost impossible to increase their gross domestic product per capital income for the reason that gross domestic product (GDP) must increase at a rate which is more rapid that the population, generally in this developing countries population growth is more than that of developed countries (Ephantus,2004)

Per capital income (PCI) is used in measuring economic development. It is defined as a measure of sum amount of money that each individual earns in a given county, of the annual income generated in a country or what a citizen receives if the annual national income is divided into equal proportions among everyone in a country. In third world countries per capital income (PCI) is not considered as a good measure of level of living because it ignores the distribution of output among the members of a society. The masses may become worse off if the increase in gross national product (GNP) goes to a few rich and not the many poor.

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