Q. Consider the following statements about Net National Product (NNP):
1. It is the total money value of final goods and services produced in the economy during a year after deducting depreciation and net income from abroad.
2. It is always lower than NDP.
3. NNP is expressed in the currency of the nation it represents.
Which of the above given statement is/are correct?
Answer: A
Notes:
Explanation: Net national product (NNP) is the market value of a nation’s goods and services (GNP) minus depreciation (often referred to as capital consumption).
The formula for NNP is:
- NNP = Market Value of Finished Goods + Market Value of Finished Services – Depreciation
- Alternatively, NNP can be calculated as:
- NNP = Gross National Product – Depreciation
- It can also be found out by adding the NFIA (National Factor Income from Abroad) to the NDP. If the NFIA is positive, that is, the inflow of factor income from abroad is more than the outflow;
- NNP will be more than NDP. Conversely, if NFIA is negative, NNP will be less than NDP and it would be equal to NDP in case the NFIA is zero.
- NNP provides an expression of the net value of the goods and services a nation has produced during a specific time, often examined on an annual basis as a way to measure a nation’s success in continuing minimum production standards.
- The NNP is expressed in the currency of the nation it represents.
Source: NCERT
