Question:
Trace the relationship between GNP and NNP.
Author: Vimala BaluAnswer:
GNP Gross National Product is the total measure of the flow of final goods and services at market value resulting from current production in a country during a year, including net income from abroad NNP Net National Product refers to the value of the net output of the economy during the year. NNP is obtained by deducting the value of depreciation, or replacement allowance of the capital assets from the GNP.
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Alternative answers:
GNP at market prices means the gross value of final goods and services produced annually in a country plus net factor income from abroad (C + I + G + (X-M) + (R-P)). GNP at Market Prices = GDP at Market Prices + Net Factor income from Abroad.
NNP at factor cost = NNP at Market prices – Indirect taxes + Subsidies.
Author
Vimala Balu