Question

Which of the following includes the values of depreciation?

• A. NDP
• B. NNP
• C. GDP
• D. All of these

Hint:

NNP (Net National Product) is a more accurate reflection of the economy's performance as it factors in the depreciation of capital goods.

Answer 1

The Correct Option is B

Step 1: Understanding NNP and Depreciation.
Net National Product (NNP) includes the values of depreciation, which accounts for the reduction in the value of capital goods over time. NNP is derived from Gross National Product (GNP) by subtracting depreciation.
Step 2: Analysis of options.
- (A) NDP: Net Domestic Product also adjusts for depreciation but is not the most direct measure.
- (B) NNP: Correct answer, as NNP directly accounts for depreciation.
- (C) GDP: Gross Domestic Product does not subtract depreciation and thus does not include it.
- (D) All of these: Incorrect, as GDP does not include depreciation.
Step 3: Conclusion.
NNP is the measure that includes depreciation, making the correct answer (B) NNP.