Gross national income (GNI) replaces which previous term?

Gross national income (GNI) replaces which previous term?

• A. Net domestic product (NDP)
• B. Gross national product (GNP)
• C. Net national income (NNI)
• D. Income per capita

Answer: (B)

Gross national income (GNI) is a newer term that reflects the total economic output of a nation, which includes the value of all goods and services produced by residents of a country, regardless of where the production takes place. This concept encompasses the income earned by residents from investments abroad and subtracts income earned by foreign residents within the country. The term GNI essentially replaces gross national product (GNP), which was the earlier metric that measured similar economic performance. GNP focused on the production aspect but did not fully capture all forms of income generated by residents, particularly in a globalized economy where income is often earned across borders. By making this transition to GNI, there is a more comprehensive reflection of the economic activity attributable to the residents of a nation. This is particularly important in today's increasingly interconnected global economy, where understanding the flow of income and resources is essential for policymakers and economists. Therefore, GNI serves as a more accurate and relevant measure of a country's economic strength compared to GNP, which it effectively replaces.

Gross national income (GNI) is a newer term that reflects the total economic output of a nation, which includes the value of all goods and services produced by residents of a country, regardless of where the production takes place. This concept encompasses the income earned by residents from investments abroad and subtracts income earned by foreign residents within the country.

The term GNI essentially replaces gross national product (GNP), which was the earlier metric that measured similar economic performance. GNP focused on the production aspect but did not fully capture all forms of income generated by residents, particularly in a globalized economy where income is often earned across borders.

By making this transition to GNI, there is a more comprehensive reflection of the economic activity attributable to the residents of a nation. This is particularly important in today's increasingly interconnected global economy, where understanding the flow of income and resources is essential for policymakers and economists. Therefore, GNI serves as a more accurate and relevant measure of a country's economic strength compared to GNP, which it effectively replaces.