Question : Which of the following is a measure of national income that takes into account the depreciation of capital?
Option 1: Gross National Product (GNP)
Option 2: Net National Product (NNP)
Option 3: Gross Domestic Product (GDP)
Option 4: Net Domestic Product (NDP)
Correct Answer: Net National Product (NNP)
Solution : The correct answer is b) Net National Product (NNP).
Net National Product (NNP) is a measure of national income that takes into account the depreciation of capital. It is calculated by subtracting depreciation from the Gross National Product (GNP). NNP provides a measure of the net output generated by the residents of a country after accounting for the wear and tear on capital assets.
Gross Domestic Product (GDP) is a measure of the total value of goods and services produced within the domestic boundaries of a country, regardless of the nationality of the factors of production. It does not account for depreciation. Gross National Product (GNP), on the other hand, takes into account the output produced by the residents of a country, regardless of their location.
