Scenario 5.1 Suppose that personal income is $250 billion.Furthermore, assume that retained corporate earnings are $2 billion, Social security taxes are $15 billion, Social security benefit checks equal $16 billion, the capital consumption allowance is $32 billion, and corporate taxes amount to $40 billion.
Refer to Scenario 5.1.What will be the value of net national product in this country?

Question

Quizplus · Accepted Answer

Net national product (NNP) is calculated by subtracting capital consumption allowance from gross national product (GNP). 
GNP = Personal income + Retained corporate earnings + Social security taxes + Social security benefit checks + Corporate taxes
GNP = $250 billion + $2 billion + $15 billion + $16 billion + $40 billion = $323 billion
NNP = GNP - capital consumption allowance = $323 billion - $32 billion = $291 billion. Therefore, the best answer choice is (D) $291 billion.