Answer:
In the late 1080s, the United States's primary measurement for economic growth was called the gross national product or GNP. This metric was used to calculate the total value of goods and services produced by a country's citizens, regardless of their location. However, in the years that followed, the GNP was replaced by an updated metric known as the gross domestic product or GDP.
The shift from GNP to GDP was a result of significant changes in the global economic landscape, including the rise of multinational corporations and the growth of international trade. In the past, GNP measures were calculated based on the geographic location of the producing entities, meaning that a company's profits earned outside of the country were included in the GNP. However, as cross-border trade became more prevalent, the GNP became an outdated metric to evaluate a nation's overall economic strength.
The replacement of GNP with GDP was a necessary update to provide a more accurate measurement of a country's economic output. GDP measures the total value of all goods and services produced within its borders, including those produced by foreign entities. This formula is more inclusive of the global economy and reflects the overall output of a nation's economy without taking into account the activities carried out by entities outside its borders.
The switch to GDP was also a response to a significant societal shift in America’s moral and ethical attitudes. The updated metric better reflects the true costs to society of goods and services. It accounts for environmental, social, and health damages that were not captured in the GNP.
Despite the shift from GNP to GDP, some have criticized the use of GDP as an indicator of numerous aspects, especially the well-being of citizens. GDP only measures economic growth and the overall output of a nation's economy without taking into account other factors such as income inequality and the distribution of wealth. This critique has urged researchers to create new metrics that account for these multifaceted variables.
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