Gross National Product (GNP) is a comprehensive measure of a country’s economic activity. It represents the total value of all final goods and services produced by a country’s residents, regardless of where that production occurs. This contrasts with Gross Domestic Product (GDP), which measures the value of goods and services produced within a country’s borders. As an illustration, if a U.S. citizen owns a factory in Mexico, the profits from that factory would contribute to the United States’ GNP, but to Mexico’s GDP.
Understanding this metric is vital in AP Human Geography because it provides insights into a nation’s economic connections to the global economy and its citizens’ economic output worldwide. It highlights the significance of multinational corporations and international investments on a nation’s wealth. Historically, GNP was a primary indicator of economic health before the rise of globalization made GDP a more commonly used measure for comparing economies’ performance within their geographical boundaries. The consideration of economic activities extending beyond national borders provides a more complete picture of a nation’s financial involvement in the world.