The correct answer is (b).
Net national product (NNP) is the total market value of all final goods and services produced by a country’s residents in a given year, minus depreciation. It is calculated by adding gross domestic product (GDP) to net income from abroad and then subtracting depreciation.
GDP is the total market value of all final goods and services produced within a country’s borders in a given year. It is calculated by adding up the value of all goods and services produced by businesses, households, and governments.
Net income from abroad is the income that a country’s residents earn from investments abroad, minus the income that foreigners earn from investments in the country.
Depreciation is the decrease in the value of capital goods over time due to wear and tear.
Therefore, NNP is calculated as follows:
NNP = GDP + Net income from abroad – Depreciation
(a) NNP = GNP â Depreciation is incorrect. GNP is gross national product, which is the total market value of all final goods and services produced by a country’s residents in a given year, regardless of where they are located. It is calculated by adding up the value of all goods and services produced by businesses, households, and governments, both within and outside the country’s borders. NNP is different from GNP because it subtracts depreciation.
(c) Both (a) and (b) are correct is incorrect. (a) is incorrect, as explained above.
(d) None of these is correct.