Net National Product- NNP


NNP = GNP – Depreciation

or,

NNP = GDP + Income from Abroad – Depreciation

This is the ‘National Income’ (NI) of an economy.

This is the purest form of the income of a nation.

When we divide NNP by the total population of nation we get the ‘per capita income’ (PCI) of that nation.

Net National Product at FC (Factor Cost) (National Income)—

It is the sum total of factor incomes (compensation of employees + rent + interest + profit) earned by normal residents of a country in an accounting year

Net national product at factor cost is same as national income.

Net National Product at MP (Market Price)—

It is the sum total of factor incomes earned by the normal residents of a country during an accounting year including net indirect taxes.

NNP MP = NNP FC + Indirect tax – Subsidy