If depreciation equals zero and retained earnings equal $25 billion, then
A) GNP is less than net national product by $25 billion.
B) GNP equals net national product.
C) net national product is less than GNP by $25 billion.
D) GNP is greater than GDP by $25 billion.

Question

Quizplus · Accepted Answer

When depreciation equals zero, there is no difference between Gross National Product (GNP) and Net National Product (NNP), as depreciation is the adjustment needed to go from GNP to NNP. Retained earnings do not affect this relationship.

If Depreciation Equals Zero and Retained Earnings Equal $25 Billion