Question

What is Net National Product (NNP)?
1. NNP = GNP - Depreciation
2. NNP = GDP = Income from abroad
3. NNP = GNP + Depreciation
4. NNP = GDP - Income from abroad

Answer 1

Correct Answer - Option 1 : NNP = GNP - Depreciation

The correct answer is NNP = GNP - Depreciation.

• Net National Product (NNP) is NNP = GNP - Depreciation.

• Net National Product (NNP):
  • NNP is obtained by subtracting depreciation value (i.e. capital stock consumption) from GNP.

• Gross Domestic Product (GDP):
  • It is the total money value of all final goods and services produced within the geographical boundaries of the country during a given period of time.
  • GDP = C + G + I
    • C = Consumption expenditure
    • G = Government expenditure
    • I = Investment expenditure
• Gross National Product (GNP):
  • It refers to the money value of the total output of production of final goods and services produced by the nationals of a country during a given period of time, generally a year.
• National Income (NI):
  • When NNP is calculated at factor cost (FC) it is called National Income.
  • The measure is calculated by deducting indirect taxes and adding subsidies in NNP at Market Price (MP).
  • In India, the Wholesale Price Index (WPI) is the weighted average price of 676 items with the base year 2017-18.