<p>GDP refers to income associated to particular <strong>geography</strong> (or residence).</p>

<p>GNI refers to income associated to a particular set of <strong>individuals</strong> (citizens), regardless of where they earn their income.</p>

<p>Since geography and citizenship do not fully overlap, they might be different:</p>

<p><a href="https://i.sstatic.net/l0TsM.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/l0TsM.png" alt="enter image description here"></a></p>

<p>I think this is enough to help you answering the question.</p>

<p>(code for reproducing the figure <a href="https://paste.ubuntu.com/25145479/" rel="nofollow noreferrer">here</a>)</p>

CC BY-SA 3.0
2017-07-22T10:08:30.893Z
2017-07-22T10:22:04.633Z
2017-07-22T10:22:04.633Z
luchonacho
<blockquote>
  <p>Based on domestic production we observe the following income flows in a period:</p>
  
  <ol>
  <li><p>labor income of domestic residents: 150\$</p></li>
  <li><p>capital income received by foreign residents with a foreign citizenship: 5\$</p></li>
  <li><p>capital income of domestic residents with a foreign citizenship: 15\$</p></li>
  <li><p>capital income received by foreign residents with a domestic citizenship: 25\$</p></li>
  <li><p>capital income earned by domestic citizens with a domestic residence: 20\$</p></li>
  </ol>
  
  <p>Calculate the Gross Domestic Product (GDP) and the Gross National Income (GNI) of the economy:</p>
</blockquote>

<p>Not sure how to solve this problem. As I understand GDP = 1+3+5, GNI = 1+4+5</p>

<p>I don't think that I understand how to treat foreign residents with foreign citizenship.</p>

<gdp>
Difference between GDP and GNI in this exercise
Peter Bodnar
# Difference between GDP and GNI in this exercise

(Asked by: username_0 on 2017-07-21)

> Based on domestic production we observe the following income flows in a period:
>
> 1. labor income of domestic residents: 150\$
> 2. capital income received by foreign residents with a foreign citizenship: 5\$
> 3. capital income of domestic residents with a foreign citizenship: 15\$
> 4. capital income received by foreign residents with a domestic citizenship: 25\$
> 5. capital income earned by domestic citizens with a domestic residence: 20\$
>
> Calculate the Gross Domestic Product (GDP) and the Gross National Income (GNI) of the economy:

Not sure how to solve this problem. As I understand GDP = 1+3+5, GNI = 1+4+5

I don't think that I understand how to treat foreign residents with foreign citizenship.

**Tags:** gdp


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## 1 answers

### Answer by username_1 on 2017-07-22. Score: 2 | Accepted answer

GDP refers to income associated to particular **geography** (or residence).

GNI refers to income associated to a particular set of **individuals** (citizens), regardless of where they earn their income.

Since geography and citizenship do not fully overlap, they might be different:

[![enter image description here](https://i.sstatic.net/l0TsM.png)](https://i.sstatic.net/l0TsM.png)

I think this is enough to help you answering the question.

(code for reproducing the figure [here](https://paste.ubuntu.com/25145479/))


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