Which of the following statements correctly describes Net National Product at market price (NNPMP)?
Answer and explanation
Correct answer: It includes net factor income from abroad and deducts depreciation.
NNP at market price is calculated as GNP at market price minus depreciation. Because it is national rather than domestic, it includes net factor income from abroad, which accounts for income earned by normal residents from the rest of the world after relevant payments. Option B describes a domestic production concept, option C uses the wrong treatment of depreciation, and option D describes an incorrect conversion to national income.
Frequently asked questions
What is the correct answer to this question?
It includes net factor income from abroad and deducts depreciation.
Why is this the correct answer?
NNP at market price is calculated as GNP at market price minus depreciation. Because it is national rather than domestic, it includes net factor income from abroad, which accounts for income earned by normal residents from the rest of the world after relevant payments. Option B describes a domestic production concept, option C uses the wrong treatment of depreciation, and option D describes an incorrect conversion to national income.
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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