GDP And GNP

7 Pages 1676 Words

GDP and GNP: What do they mean for Canada?

My paper will look at GDP, Gross Domestic Product, and GNP, Gross National Product and how these two economic measurements can tell us a lot about the Canadian economy. I will begin with an introduction of both GDP and GNP, then I will discuss what these two tools mean for Canada. I will conclude with a brief look at current GDP/GNP levels and what they might hold for the future.

GDP
GDP. What is it? Products, or productivity, are said to be the results of production. But what type of production are we dealing with here? The making of cars? The cutting of wheat fields? How about the selling of something in the Halifax Shopping Center? Actually, these are all the type of productivity we are looking at in this paper. GDP is the measurement of economic output. Labour productivity is the measurement of real GDP generated per hour of work. It is a useful reading of the strength of our work force. Strong labour productivity can mean higher paying jobs for our workers, meaning more money will be in the hands of the members of the work force. Since higher levels of productivity lower the prices of goods and services, better wages and living standards can be more easily achieved by all Canadians. In fact, in 1999 the productivity of workers in the goods sector rose by 2.1% and 1% in the services sector. This caused GDP for the year to be three times the levels for 1998, 1.4% compared to .5% in 1998.

GDP is said to be a useful indicator of just how well the economy is doing. In our modern economy, productivity increases can reflect improvements in a number of critical areas, such as the advancement of production techniques or the capacity to use knowledge better. Productivity also provides the foundation for improvements in a country’s standard of living. Wages and salaries grow when businesses become more efficient, and higher production efficiency also allows the prices o...