Main macroeconomic indicators

Gross domestic product (GDP) is the total market value of final goods and services produced within a country in a year; it is counted whoever the producer is (local or foreign). Intermediate products (raw materials, spare parts, fuel) are left out, otherwise one value would be counted twice: if a wheel becomes part of a tractor, only the tractor is counted. Gross national product (GNP) is the final output created by a country’s citizens and firms wherever they are: GNP = GDP + E − I, where E is output created abroad with the country’s capital and I is output created in the country with foreign capital. Wear of equipment (depreciation allowance A) is not new value, so net domestic product NDP = GDP − A; net national product (NNP) is likewise GNP − A. National income is the sum of the population’s wages, interest, rent and firms’ profits, and it can also be found by subtracting indirect taxes from NDP. To compare living standards between countries, GDP per capita (GDP : population) is used; the book’s population figure (33 million) is outdated, as it is now over 37 million, so calculations use conditional numbers.