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 calculated by subtracting the depreciation value (also known as the capital consumption allowance) from the Gross National Product (GNP). NNP provides a measure of national income that accounts for the wear and tear of capital goods over time.
Gross National Product (GNP) represents the total value of all goods and services produced by the residents of a country, whether domestically or abroad, within a specific period. It does not consider depreciation.
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