... total amount of value added that has been produced, at all stages of production, in the economy in a year. Finally GNP is a comprehensive measure of national income. £1 spent on a loaf of bread will be entirely spent on providing income for the farmer, miller and baker. Every pound of spending is translated into a pound of wages, rent or profits. There is nothing left over. The biggest problem when using GNP is that to make any relevant worthy comparison you have to compare like units with like. When comparing GNP over years for the same country they can be expressed as a normal figure of pounds. This is of no use as in different years the pound would have had different purchasing power. To obtain a real value of change in nation income you have to find the real GNP. You do this by dividing the nominal GNP by the ...

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