The difference between Gross National Product and Net National Product is the
A)rate of inflation.
B)statistical discrepancy encountered in calculating GDP.
C)difference between real versus nominal GDP.
D)depreciation of the economy's capital stock.

Question

Quizplus · Accepted Answer

Gross National Product (GNP) is the total market value of all goods and services produced by a country's residents and businesses, regardless of the location of production. Net National Product (NNP) is GNP minus depreciation, which is the amount of capital that is consumed or used up during the production process. Therefore, the difference between Gross National Product and Net National Product is the depreciation of the economy's capital stock (Choice D). Choices A, B, and C are not accurate explanations for the difference between GNP and NNP.

The Difference Between Gross National Product and Net National Product