What is the clear difference between GDP and GNP?

How can we compare two countries by using the two indicators?

GDP or gross domestic product is a measure of national income produced in a particular country. GNP or gross national product is the account of net income that is received from the abroad. The GDP includes the national income of the country but GNP includes the GDP plus net income obtain from the abroad.

The two indicators can be used to measure and compare the overall health and size of two countries economy. To compare the GDP and GNP of two countries we need to convert the currencies of two distinct countries into common currencies.

GDP or Gross domestic product is a total value of the domestic produce of the nation at a specific time period.

The GNP or Gross national product is the total value of all the finished goods and services which is owned by a nation's residents over a time period. The difference between Gross domestic product and Gross national product is that GDP limits the understanding of the economy within the country while GNP extends its meaning to the total value of produce which includes economic activities done outside the country by its nationals.

Gross domestic product indicates how a country is developing as an economy. While GNP shows how the citizens of a particular country are contributing to the economy of the country.