What is the main difference between GNP and NNP?
Answer and explanation
Correct answer: Depreciation
GNP is a gross national product measure because it is calculated before deducting depreciation, also called consumption of fixed capital. NNP is the corresponding net measure: NNP = GNP − depreciation. NFIA is instead the adjustment that converts GDP into GNP, so it does not explain the difference between GNP and NNP. Thus depreciation is the correct answer.
Frequently asked questions
What is the correct answer to this question?
Depreciation
Why is this the correct answer?
GNP is a gross national product measure because it is calculated before deducting depreciation, also called consumption of fixed capital. NNP is the corresponding net measure: NNP = GNP − depreciation. NFIA is instead the adjustment that converts GDP into GNP, so it does not explain the difference between GNP and NNP. Thus depreciation is the correct answer.
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 - GNP.
