Final answer:
Gross National Product (GNP) measures the income earned by U.S.-owned firms and residents, accounting for both domestic and international economic activity. It is a key component of national income accounting and is linked with other economic indicators to assess the financial state of a nation.
Step-by-step explanation:
The annual income earned by U.S.-owned firms and U.S. residents can be understood through the concept of Gross National Product (GNP). This measure accounts for all the goods and services produced by a nation, plus the income earned by its citizens and corporations, even if they are located overseas. It differs slightly from the Gross Domestic Product (GDP), which measures economic activity within a nation's borders, not accounting for international income. Both GNP and GDP are part of the broader field of national income accounting, which helps determine a nation's economic performance.
National Accounts, such as GNP and GDP, are closely related to other economic indicators like the Consumer Price Index (CPI) and the Producer Price Index (PPI), which measure inflation. Understanding these concepts is important for grasping the mechanisms of Money, Banking & Finance as well as Population, Employment, & Labor Markets, which all contribute to a comprehensive view of a nation's economic health.