Download App

National Income — Economics STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsNational Income3 Marks
Question
Write a short note on Net National Product $(NNP).$
✓

Answer

  • Introduction :
  • During the year we make use of machines, equipments, building etc. assets for gross national product ($GNP$).
  • With the passage of time there is reduction in its value.
  • The reduction in these assets value is Depreciation.
  • When we deduct Depreciation from $GNP$ we get national income at factor cost.
  • Meaning of $NNP$ :
  • After deducting the depreciation of the factors of production employed in the process of production, the total market value of all final goods and service left within the country is called $NNP$.
  • In other words, the remaining monetary value after deducting depreciation from the monetary value of goods and services produced by citizens of country is called $NNP$.
  • Formula : $NNP$ = $GNP$ - $D$
  • $($Net National Product$) = ($Gross National Product$) - ($Depreciation$)$
  • Example :
  • Suppose the market value of gross national product is $t$ $5,000$ crore. Capital goods used for the production is depreciated by $500$ Crore. Then $NNP$ is $5000 - 500 = 4500$ Crore.
  • Important Points :
  • $NNP$ is the value obtained by deducting depreciation of factor used in process of production.
  • $NNP  = GNP - $ Depreciation
  • It is difficult to find $NNP$ of any country because the depreciation of factors has to be deducted from it.
  • And depreciation depends upon the price of capital goods and expected life of capital goods.
  • It is difficult to know these things.
  • In the same way, h is difficult to know what amount will be necessary to buy new machine in future.
  • If there is recession, the price of the machine might be less.
  • Some times to sustain in the market competition, machine has to be replaced.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "3 Marks Each" from National Income→National Income — all question types→Economics STD 11 Commerce question papers→Gujarat Board STD 11 Commerce question papers→Gujarat Board question paper generator→

Similar questions

Explain the meaning of income effect and substitution effect.
→
Explain the relation between Use- Value and Exchange- Value.
→
Explain the concept of Giffen goods.
→
Calculation the elasticity of demand by using total outlay method. The demand for A commodity is $100$ units when unit price is $Rs. 10$. If the price increases to $5$ demand reduces to $300$ units. Calculate the elasticity of demand.
→
What is perfect competitive market ? State its conditions.
→
Describe: The opinion of Pandit Deendayal related to 'Ownership of Assets'.
→
Represents the data of wheat production on bar diagram. Wheat production in India is as follows:
Year $1970-71$ $1980-81$ $1990-91$ $2000-01$ $2010-11$
Production $($In lakh tonn.$)$ $23.8$ $36.3$ $55.1$ $69.7$ $86.9$
→
State the points to be kept in mind regarding the advantages and uses of Beejamrit.
→
Give function and the sources of income of 'Panchayats'.
→
Explain increase-decrease of supply along with diagram.
→