Question

Which of the following best defines Net National Income ?
1. GNP + Depreciation
2. GNP – Depreciation
3. GDP – Depreciation
4. NDP – Depreciation

Answer 1

Correct Answer - Option 2 : GNP – Depreciation

The Correct Answer is ​GNP – Depreciation.

 

• Net National Income is Gross National Income or Gross National Product less depreciation.
• When depreciation is deducted from the GNP, we get Net National Income.

 

• National income
  • It is the sum of income earned by its residents from the factor services rendered to the production units, both within and outside the geographical boundaries of the country.
• GNP
  • Gross National Product is defined as the total market value of all final goods and services produced in a year by Nationals of a country both inside and outside the country’s territory.
• Depreciation
  •  Depreciation represents how much of an asset's value has been used up.