GDP versus GNP

GDP measures the output of goods and services within the borders of the country. Gross National Product (GNP) measures the output of a nation's factors of production, regardless of whether the factors are located within the country's borders. For example, the output of workers located in another country would be included in the workers' home country GNP but not its GDP. The Gross National Product can be either larger or smaller than the country's GDP depending on the number of its citizens working outside its borders and the number of other country's citizens working within its borders.

In the United States, the Gross National Product (GNP) was used until the early 1990's, when it was changed to GDP in order to be consistent with other nations.

Consumer Price Index
(CPI)

The most commonly reported measure of the consumer price levels in the United States is the Consumer Price Index (CPI). Published by the U.S. Department of Labor 's Bureau of Labor Statistics, the CPI is a fixed-weight price index using a fixed basket of goods that are representative of what a typical consumer purchases each month.

There are many different CPI's calculated by region, types of products, types of consumers, etc. The most commonly reported CPI is the CPI-U, which is the CPI for all urban consumers.

Increases in the CPI level serve as a measure of the consumer inflation rate. The rate of inflation over a period of time is simply the percentage increase in the CPI over the period, often reported on an annualized basis.