Which statement correctly identifies net national product at market price (NNP_MP)?
Answer and explanation
Correct answer: It is the market value of final goods and services produced by normal residents in a year after deducting depreciation.
NNP_MP is obtained from GNP_MP by deducting consumption of fixed capital, commonly called depreciation. The word ‘national’ refers to production by normal residents, including their net factor income relationship with the rest of the world; ‘net’ means depreciation has been deducted; and ‘market price’ means valuation includes the effect of net indirect taxes. Hence option C gives the correct identity.
Frequently asked questions
What is the correct answer to this question?
It is the market value of final goods and services produced by normal residents in a year after deducting depreciation.
Why is this the correct answer?
NNP_MP is obtained from GNP_MP by deducting consumption of fixed capital, commonly called depreciation. The word ‘national’ refers to production by normal residents, including their net factor income relationship with the rest of the world; ‘net’ means depreciation has been deducted; and ‘market price’ means valuation includes the effect of net indirect taxes. Hence option C gives the correct identity.
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.
Student feedback
Was this question useful?
👍 0 Helpful 👎 0 Not helpful
Yes 0% No 0%
0 responsesStudent Reviews
No published reviews yet.
