GMS 724 Study Guide - Midterm Guide: Gross National Income, Genuine Progress Indicator, Monetary Base
Document Summary
Chapter 3 - gross national income - part 3. Net national product (nnp): calls for measuring the depletion of natural resources and degradation of the environment that results from generating gni. As a company must depreciate its tangible and intangible assets when making a product, goes this reasoning, so too should countries. Nnp does so by depreciating the country"s assets commensurate with their use to generate growth. Genuine progress indicator (gpi): starts with the same accounting framework used to calculate gdp but then adjusts for values assigned to environmental quality, population health, livelihood security, equity, free time, and educational attainment. For example, unlike gdp, gpi values unpaid voluntary and household work as paid work and subtracts the costs of crime, pollution, and family breakdown. Effectively, gdp versus gpi is analogous to the difference between the gross profits versus net profits of a company--- net is gross less the costs incurred.