A:

The key economic indicators used to calculate gross national income (GNI) are gross domestic product (GDP) net compensation receipts, net property income receivable and net taxes. GNI is the sum of GDP and income received from overseas. For most developed countries, there is not a significant difference between the two measures.

Gross National Income

GNI is used in conjunction with gross domestic output and gross national product (GNP) to better understand and compare a country's economic performance. Specifically, GNI measures the total value added by all income-producing workers in a country, including income earned from abroad.

GNI Vs. GDP

GDP is the most widely cited economic indicator and is used to measure and compare countries' economic output. To convert GDP into GNI, net compensation receipts, net property income receivables and net taxes are added to GDP. Basically, GNI also includes the difference between how much income is received from abroad and payments to the rest of the world. For most countries, this is not a significant figure compared to GDP.

However, for certain countries such as the Philippines, India or Pakistan, workers going abroad to work is a significant chunk of the economy. For these countries, this is a major factor that can lead to significant divergences between GDP and GNI, with GNI capturing this segment of the economy. In other countries where foreign companies are domiciled, GNI may be less than GDP as income earned flows overseas.

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