What does Gross National Product (GNP) measure?

Gross National Product (GNP) measures the total income generated by the residents and businesses of a country, regardless of whether that income is earned within the country's borders or abroad. This means GNP takes into account the economic activities of nationals and companies that operate globally, including income received from investments overseas.

In this sense, it reflects the overall economic performance and production capability of a nation's populace, giving a fuller picture of their economic contributions. This distinction is important because it helps assess the wealth generated by the citizens of a country rather than solely the economic activity occurring within its physical borders, which is what Gross Domestic Product (GDP) measures.

This aspect of GNP is crucial for understanding the economic dynamics of a nation, especially in a globalized economy, where many companies and individuals earn significant portions of their income internationally. Other options presented, such as environmental costs, happiness levels, or international trade balances, do not align with the definition or measurement scope of GNP.