Question

Explain the following terms.

Net national product at market price.

Answer 1

The net money worth of finished products and services produced in a nation at current prices within a single year is known as the net national product, or NNP. The net national product at market value is obtained by deducting the depreciation charges from the gross national product. Depreciation is the term used to describe how a country's fixed capital stock loses value over time. Depreciation charges are typically incurred for capital equipment obsolescence, plant renewal, and wear and tear throughout production. Production will drop the next year if we don't make these allowances. Therefore, the net money worth of finished products and services created over the course of a year is the net national product.

NNP at Market Prices = GNP at market price − Capital consumption allowances.

NNP_MP = MNP_MP − CCA