What is the difference between GNP and NNP?
Answer and explanation
Correct answer: Depreciation
The word ‘gross’ means that depreciation, or consumption of fixed capital, is included. The word ‘net’ means that depreciation has been deducted. Therefore, NNP is obtained from GNP by subtracting depreciation: NNP = GNP − depreciation. Net exports, private consumption, and imports are not the defining difference between these two national aggregates. Hence option A is correct.
Frequently asked questions
What is the correct answer to this question?
Depreciation
Why is this the correct answer?
The word ‘gross’ means that depreciation, or consumption of fixed capital, is included. The word ‘net’ means that depreciation has been deducted. Therefore, NNP is obtained from GNP by subtracting depreciation: NNP = GNP − depreciation. Net exports, private consumption, and imports are not the defining difference between these two national aggregates. Hence option A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
Student feedback
Was this question useful?
👍 0 Helpful 👎 0 Not helpful
Yes 0% No 0%
0 responsesStudent Reviews
No published reviews yet.
