How do GDP and GNI classifications help in understanding global economic disparities among countries?

GDP, or Gross Domestic Product, measures the total value of goods and services produced within a country over a specific time, while GNI, or Gross National Income, includes the total income earned by a country's residents, regardless of where that income is generated. Understanding these classifications helps us see how different countries are performing economically and highlights disparities between them. For example, a country may have a high GDP due to large industries, but if many of its residents earn income abroad, its GNI might not be as high, indicating that wealth isn't evenly distributed among its people. This difference can show us why some countries might appear wealthy based on GDP but still have high poverty rates when considering GNI. By comparing these measures, we can better understand the economic challenges and opportunities faced by various nations.