Monday, December 20, 2010

Post 12: To the Editor

To whom it may concern,

Although GDP is a roughly estimated amount of "Gross domestic product" it is a faulty indicator because it fails to include many products. Because GNP measures the output generated by a country's enterprises both in the US and outside it's boarders, it may be a better predictor since GDP only measures the total output produced within the US borders even if it's produced by the US's own firms or not. The only reason why the US uses the GDP as it's main estimator is because most other countries have already adopted the GDP estimator to predict their national product.  Because GNP calculates the total income of the country (GNP = GDP + NR (Net income from assets abroad (Net Income Receipts), it creates a more accurate representation of the nation's yearly economy which can be easily studies and analyzed to create trends and predictions.


1 comment:

  1. Is the "because the other nations do it" argument a valid one? Does the GDP make the US look better than the GNP? It is an old trick to use whatever formula puts things in the best light.

    Mr. C