How is Gross National Product (GNP) calculated?

Gross National Product (GNP) measures the total economic output produced by a country's residents, regardless of whether that production occurs domestically or abroad. The calculation of GNP includes the total value of goods and services produced within a nation, as well as income earned by residents from investments or work abroad, which reflects the economic contributions of citizens, irrespective of their location at the time of earning.

The correct approach to calculating GNP combines the total value of domestic goods and services with the income residents earn from overseas investment or work. The addition of income earned by citizens overseas ensures that the measure adequately captures the economic activities that contribute to the wealth of the country's inhabitants. Meanwhile, deducting the income that foreigners earn from domestic production prevents double counting, as those earnings are already accounted for in the Gross Domestic Product (GDP) of the country.

Therefore, counting the income of citizens working outside the country while subtracting income earned by foreigners ensures a comprehensive understanding of the economic activity that reflects the nation’s overall economic health and the productive contributions of its citizens, solidifying the rationale behind the correct calculation method reflected in option D.