National income: concepts and measurement

National income accounting keeps score for the whole economy. Gross domestic product (GDP) is the market value of all final goods and services produced within a country's borders in a year; gross national product (GNP) adds net factor income from abroad. Only final goods count, to avoid double counting, and only current production counts, so second-hand sales are excluded. Worked example: an economy with consumption 500, investment 200, government spending 150, exports 120 and imports 90 has GDP = 500 + 200 + 150 + 120 - 90 = 880.