The difference between GNP and NNP is equal to:
A)the statistical discrepancy in calculation.
B)the capital consumption allowance.
C)the difference between government spending and transfer payments.
D)the value of net exports.
E)the change in inventory.

Question

Quizplus · Accepted Answer

The difference between GNP (Gross National Product) and NNP (Net National Product) is equal to the capital consumption allowance, which refers to the depreciation of capital goods during the production process. GNP accounts for all the final goods and services produced by a country's residents, regardless of their location, while NNP subtracts the depreciation of capital goods from GNP to arrive at the net income earned by residents. The other choices (A, C, D, and E) do not represent the difference between GNP and NNP.

The Difference Between GNP and NNP Is Equal To