If GNP at market price is ₹800 crore and depreciation is ₹50 crore, what is NNP at market price?
Answer and explanation
Correct answer: ₹750 crore
Net National Product at market price is obtained by subtracting depreciation, also called consumption of fixed capital, from Gross National Product at market price. The formula is NNPMP = GNPMP − Depreciation. Substituting the given values: ₹800 crore − ₹50 crore = ₹750 crore. Therefore, option A is correct. The gross value includes the loss in value of capital goods, whereas the net value excludes that loss.
Frequently asked questions
What is the correct answer to this question?
₹750 crore
Why is this the correct answer?
Net National Product at market price is obtained by subtracting depreciation, also called consumption of fixed capital, from Gross National Product at market price. The formula is NNPMP = GNPMP − Depreciation. Substituting the given values: ₹800 crore − ₹50 crore = ₹750 crore. Therefore, option A is correct. The gross value includes the loss in value of capital goods, whereas the net value excludes that loss.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - NNP.
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