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Question
Distinguish between:
Gross National Product and Net National Product
Solution
| Basis | Gross national product | Net national product |
| 1. Definition | GNP takes into account all the goods and services produced by the normal residents of a country both within the domestic territory as well as outside the country. |
NNP refers to the value of all the final goods and services produced by the normal residents of a country both within the domestic territory as well as outside the country. |
| 2. Depreciation | It includes depreciation. | It excludes depreciation. |
| 3. Treatment as national income | GNP cannot be treated as national income. | NNP is treated as national income only at factor cost. |
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