Courses : Intermediate Macroeconomics Lecturer : Frischa Adellia Semester : 4th Semester, 2022/2023 Sesion Gross National Income (GNP) Gross National Income (GNP) is an important indicator in measuring a country's economy. GNP is the total value of income received by all factors of production in a country in a certain period, both from within the country and from abroad. In calculating GNP, apart from factors of production such as labour, capital and natural resources, it also takes into account factors of receipts received from abroad such as foreign exchange or remittances. GNP is calculated by adding up all added value from various economic sectors within a country, both from domestic and foreign companies operating in that country, including income received by citizens working abroad. In measuring a country's economic welfare, GNP is used more often than GDP, because GNP is able to provide a more accurate picture of a country's ability to obtain resources from abroad. In addition, GNP can also be used to compare the economy of a country with other countries that are different in terms of the amount of income received by the people. Gross National Income (GNP) is a measure of the aggregate value of the income generated by the factors of production owned by residents of a country, both within and outside the country, during a certain period, usually one year. GNP includes income earned by citizens of a country, including those who are abroad, as well as income earned by factors of production owned by a country, both within and outside the country. GNP can be calculated using the following formula: GNP = GDP + net factor income from abroad Where: o GDP is Gross Domestic Product o Net factor income from abroad is the difference between factor income received by factors of production owned by citizens of a country abroad and factor income received by factors of production owned by foreign nationals in the country. GNP is an important measure in measuring the welfare of a country. A high GNP indicates prosperity and good economic growth in a country, while a low GNP indicates poverty and other economic problems in that country. GNP can also be used to compare the welfare of one country to another. Gross National Income (GNP) is the total value of income generated by all citizens of a country, both inside and outside the country, in a certain period of time, usually one year. GNP includes production carried out by all citizens of a country, including those who are abroad, while Gross Domestic Product (GDP) only includes production carried out within the territory of the country. In calculating GNP, all income received by citizens of a country must be added up, including income from investments or economic activities carried out abroad. GNP can provide an overview of how much a country's citizens contribute in generating income for that country, so that it can be used to compare the level of prosperity between one country and another. However, it should be noted that GNP can be influenced by external factors, such as exchange rate fluctuations and changes in government policies. Therefore, GNP does not always accurately reflect the level of welfare and prosperity of a country, but only as an indicator of economic growth. Example of calculating Gross National Income (GNP): Suppose a country has 3 economic sectors: agriculture, industry and services. Income generated by the agricultural sector is IDR 50 billion, the industrial sector is IDR 70 billion, and the service sector is IDR 80 billion. In addition, there is also income from factors of production, such as labor and capital, amounting to IDR 30 billion. So, the country's GNP is: GNP = agricultural sector income + industrial sector income + service sector income + factors of production PNB = IDR 50 billion + IDR 70 billion + IDR 80 billion + IDR 30 billion GNP = IDR 230 billion So, the country's gross national income (GNP) is IDR 230 billion. Gross National Income (GNP) can be calculated by adding up the added value of all the factors of production owned by residents of a country within a certain period of time, both inside and outside the country. Some examples of factors of production that can be calculated for GNP include: o Wages and salaries received by citizens in the country and abroad o Profits obtained by the owners of capital and shares from the businesses they run inside and outside the country o Receipt of rent from land, buildings, or other assets owned by citizens within the country or abroad For example, if an Indonesian citizen works for an American company and receives a salary of $10,000 per month, that salary will be calculated as part of Indonesia's gross national income because that person is an Indonesian citizen. The same applies to gains from overseas investments and receipt of leases from overseas assets owned by Indonesian citizens.