What is the real GNP?
The total market value of the production and services of the country during the specified time period - often annually - is referred to as its gross national product (HNP). Real GNP is a rough national product that has been modified to take into account inflation, which is a variety of cost and prices over time. Real GNP basically uses a combination of the production numbers of the current period and prices of the past period to derive a number that can be legitimately compared in time periods to determine growth or wear of the GNP country.
Some economists believe that comparison of GNP from year to year is not valid or usable exercise, as prices are changing over time. In response, they developed a real GNP that multiplies the number of units produced by the prices valid during the basic year. This allows a clear comparison of GNP every time. This data allows analysts to determine whether the country more or less produces, identify trends in national production of the competence and comparison of HNP of several countries for a long time.
GNP, which has not been modified about inflation, is sometimes known as nominal HNP, unlike real HNP. Both are often confused with GDP, which means gross domestic product. HNP represents the value of goods and services created by all citizens of the country and all real estate owned by a country or its citizens regardless of location. This means that GNP would include products produced by a plant located in France, but owned by the US.
, on the other hand, it is geographically based and takes into account only the value of these goods and services produced in a specific area during the assigned time frame. Does not take into account ownership. This means that the value of the goods produced by the plant located in the US, but owned by France, would be part of the TON us GDP rather than France's GDP.
The concept of real GNP is part of the theory of real business cycle theory. All economists do not accept it and sometimes it is a source of debates and rivalry in academic, financial,Government and economic circles. In university and university macroeconomic classes, it is likely that it will be taught as a theory rather than reality and can be compared with other more traditional methods of evaluation of the nation's production over time.