Define Gross National Product (GNP).

Understanding how to measure the Gross National Product (GNP) is fundamental in grasping a nation's economic prowess. GNP tallies the value of finished goods and services that a country's residents—whether living at home or abroad—produce over a year. To demystify the computation process, GNP can be approached from three perspectives.

The Production Approach sums up the market value of all economic output including sectors such as agriculture and services. Simply put, it's a total of everything made within the country.

Moving to the Income Approach, all earnings by the residents, encompassing wages and rents, are aggregated. This view emphasizes the income generated by the citizens.

Lastly, the Expenditure Approach looks at the total spending on various segments: personal consumption, governmental, investment in businesses, and the balance of exports and imports. It reflects the nation's collective spending habits. Adjustments are also considered for nominal GNP (direct market prices) and real GNP (factoring in inflation effects), to provide a more accurate picture of economic health over time.

GNP serves as a pivotal indicator to gauge a country's economic performance. It offers insights into how well an economy is doing by measuring growth trends and the living standards of its populace.

When assessing a nation's economic muscle, GNP per capita is crucial as it divides the GNP by the population, providing a sense of individual financial well-being. It's a metric commonly used to plot the narrative of a country's prosperity and compare it against global counterparts.

However, GNP does more than just tell a country’s financial story; it influences it too. Governments and policymakers employ GNP figures to craft informed fiscal and monetary policies. Decisions on government spending, taxation, and trade policies are often swayed by movements in the GNP. In evaluating policy efficiency or the fruits of economic reforms such as investments, GNP acts as a benchmark, showcasing the outcomes of strategic national decisions.

Despite its comprehensive nature, GNP is not without its drawbacks. One of the main criticisms is its neglect of income distribution – GNP numbers might shine while disparities in wealth persist.

Another key limitation is the blind eye GNP turns to the environmental effects of production. As long as the market value of goods and services goes up, GNP soars, with no room in its calculations for ecological degradation or resource depletion.

Unpaid labor, such as domestic work or volunteer efforts, also lies outside GNP's purview, despite its pivotal role in an economy's functioning. Consequently, these activities remain unrecognized in economic assessments.

Recognizing these flaws, alternative measures like the Human Development Index (HDI) and Gross National Happiness (GNH) have emerged. They aim to offer a broader view of societal progress, encompassing aspects such as health, education, and emotional well-being, trying to fill the gaps where GNP falls short.