Gross Domestic Product (GDP) and Gross National Product (GNP) are both measures of the economic activity of a country, but they differ in how they are calculated.
GDP is the total value of all goods and services produced within a country's borders in a given period, typically a year. It includes all final goods and services produced by individuals, businesses, and the government, but excludes income earned by foreign nationals and foreign-owned businesses within the country.
On the other hand, GNP measures the total income earned by a country's citizens and businesses, regardless of their location, in a given period, typically a year. GNP includes income earned by citizens and businesses both within and outside of the country's borders.
To calculate GNP, GDP is adjusted by adding net factor income from abroad, which includes income earned by domestic businesses and citizens abroad and subtracting income earned by foreign nationals and foreign-owned businesses within the country.
In summary, GDP measures the total economic output within a country's borders, while GNP measures the total income earned by a country's citizens and businesses, regardless of their location.