GNP stands for Gross National Product, which is an estimate of the total value of all the final products and services produced by a countrys residents, regardless of their location, in a given period of time, usually a year. It is calculated by taking the sum of personal consumption expenditures, private domestic investment, government expenditure, net exports, and any income earned by residents from overseas investments, then subtracting income earned by foreign residents.

GNP is related to another important economic measure called Gross Domestic Product (GDP), which takes into account all output produced within a countrys borders regardless of who owns the means of production. GNP starts with GDP, adds residents investment income from overseas investments, and subtracts foreign residents investment income earned within a country.

GNP is considered an important economic indicator by economists, as it provides a measure of a countrys economic output that takes into account the contributions of its citizens, regardless of their location. However, since it includes income earned by a countrys residents from investments abroad, and excludes income earned by foreign residents within the country, it can be affected by factors such as exchange rates and international trade policies.

The formula for calculating GNP is expressed as follows:

GNP = Consumption expenditure + Investment + Government expenditure + Net exports + Net income

Or

GNP = GDP + Net factor income from abroad

Where C is Consumption, I is investment, G is government, X is net exports, and Z is net income earned by domestic residents from overseas investments minus net income earned by foreign residents in the country.