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| DEFINITION |
Canada’s annual gross national product (GNP)
is the total income that residents of the country earn within the year.
It includes the wages and salaries of employees, the profits realized
by entrepreneurs and stockholders, the rents received by landlords, and
the indirect taxes (such as the Goods and Services Tax, the gasoline tax
and the provincial retail sales taxes) collected by governments. It includes
the dividends that Canadians receive from abroad, minus dividends paid
by businesses operating in Canada to foreigners.
The GNP is calculated in such a way that it is also equal to total spending
on Canadians’ goods and services. In other words, total income must
equal total spending when the sums are done for the country as a whole.
Thus, GNP is the sum of spending by consumers on food, clothing, rent,
durable goods, personal services and other items, plus government expenditures
on goods and services, plus business outlays on capital equipment and
new factories and commercial buildings, plus the spending of foreigners
when they buy exports of Canadians. Imported goods and services are deducted
in the calculation because they are not produced by Canadians.
| LINKS |
Economic Concepts – Gross Domestic Product
Source: Canadian Economy Online
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