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Econ: What are Net Domestic Product and Net National Product? 3 Views


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Description:

What are Net Domestic Product and Net National Product? Net domestic product is the amount of output from a country minus the depreciation figure. The net national product is the value of the goods and services created by a country minus the depreciation figure. The difference between the two figures is that net domestic product includes anything produced in a country, whether it be by citizens of that country or not; net national product includes anything produced by citizens of a country, no matter where it’s produced.

Language:
English Language

Transcript

00:00

And finance Allah shmoop What Our net domestic product and

00:05

net national products their ways to measure the performance of

00:11

an economy They represent the value of goods and services

00:14

created by an economy during a set time period Excluding

00:17

the production used to replace older stuff that's you know

00:21

ready to get thrown out So you've heard of GDP

00:23

Gross domestic product right Well net domestic product is GDP

00:27

is lesser known sibling You know I think about a

00:29

family with two kids They both want to make it

00:31

big in Hollywood Think the Baldwins or the Hemsworth or

00:34

the Wall Berg's One kid becomes a huge movie star

00:37

gets tons of attention Lots of press shows up on

00:39

all the red carpets and in the gossip columns you

00:42

ever kid becomes an Indy star stays mostly in the

00:44

shadows but gets some attention from critics and snooty film

00:48

fans who like black and white flicks with subtitles and

00:51

foreign language sounding things and a lot of cigarettes Well

00:54

GDP is the big budget star level Hollywood icons that

00:57

NDP is the cult favorite indie stat Well GDP tracks

01:01

the value of all the final goods and services produced

01:04

in a country during a period of time everything gets

01:07

counted That's GDP However some of that production represents Ivan's

01:11

meant to replace broken down or obsolete products Right let's

01:14

say you run a candy bar manufacturer and your Newgate

01:17

spinner breaks down You buy a new one That replacement

01:20

spinner gets counted in GDP but not in NDP You

01:24

use the machine to make your signature product smooth Newgate

01:27

Sandwich wraps Or since that production gets counted in both

01:31

GDP and NDP it's newly made stuff not products for

01:34

replacement Well in accounting terms this cost for replacement products

01:37

gets tracked as depreciation GDP includes those figures NDP leaves

01:42

them out Okay there's another distinction here to mention another

01:46

sibling Toiling Away is a Broadway understudy in a musical

01:49

version of The Hulk That third sibling is Net National

01:52

product An NPR news net domestic product counts all the

01:56

final products and services produced inside a particular country leaving

01:59

out the A replacement production Of course net national product

02:02

counts the final products and services made by citizens of

02:05

a country no matter where that production takes place in

02:09

DP looks at where it happens and NP looks at

02:12

who makes it happen So the unknown Hemsworth brother gives

02:16

a performance as the musical hulk at a theatre in

02:19

Sydney Australia The Hemsworth are Australian and he's you know

02:22

a performing in Australia that gets counted as both NDP

02:26

and NNP Now Little Hemsworth moves the production Toa London

02:31

It gets counted as an MP but not in DP

02:34

It's produced by an Australian but not in Australia So

02:39

now you see what economists think of a little Hemsworth

02:41

theater career Whether or not performing as a singing hulk

02:44

on London's West End will impress his brothers or not 00:02:46.61 --> [endTime] Well that's a different story

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