Which of the following is the correct formula for calculating NNP?

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SSC CHSL Exam 2024 Tier-I Official Paper (Held On: 02 Jul, 2024 Shift 3)
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  1. NNP = GNP – DEPRECIATION
  2. NNP = GDP – INCOME
  3. NNP = GDP – DEPRECIATION
  4. NNP = GNP + DEPRECIATION

Answer (Detailed Solution Below)

Option 1 : NNP = GNP – DEPRECIATION
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SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 02 Aug 2023 Shift 1)
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The correct answer is NNP = GNP – DEPRECIATION

Key Points

  • NNP = GNP – DEPRECIATION is the correct formula for calculating Net National Product (NNP).
  • Net National Product (NNP) is derived by subtracting depreciation from the Gross National Product (GNP).
  • Depreciation accounts for the wear and tear, decay, or obsolescence of capital assets over time.
  • GNP includes the total value of goods and services produced by the residents of a country, including income from abroad.

Additional Information

  • Gross National Product (GNP) measures the economic performance of a country by including the value of all final goods and services produced by its residents, regardless of the location of production.
  • Depreciation represents the reduction in the value of capital assets over time due to factors like wear and tear, decay, or obsolescence.
  • Net National Product (NNP) gives a more accurate picture of the economic well-being of a country by accounting for depreciation.
  • Economists and policymakers use NNP to assess the sustainability of economic growth and the long-term economic health of a country.
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