What is the use of Net National Product (NNP)?

The correct answer is To calculate per capita income Key Points

•  Net National Product (NNP) is an important economic indicator that reflects the total value of all goods and services
  •  produced by a country’s citizens and businesses, both domestically and abroad
• The use of Net National Product is to calculate per capita income.
• Net National Product (NNP):
  • NNP is obtained by subtracting depreciation value (i.e. capital stock consumption) from GNP.
• NNP reflects the true net income of an economy, it helps governments and businesses in planning for the long term.

Additional Information

• Gross Domestic Product (GDP):
  • It is the total money value of all final goods and services produced within the geographical boundaries of the country during a given period of time.
  • GDP = C + G + I
    • C = Consumption expenditure
    • G = Government expenditure
    • I = Investment expenditure
• Gross National Product (GNP):
  • It refers to the money value of the total output of production of final goods and services produced by the nationals of a country during a given period of time, generally a year.
• National Income (NI):
  • When NNP is calculated at factor cost (FC) it is called National Income.
  • The measure is calculated by deducting indirect taxes and adding subsidies in NNP at Market Price (MP).
  • In India, the Wholesale Price Index (WPI) is the weighted average price of 676 items with the base year 2017-18.