📍NET NATIONAL PRODUCT
🔸It is calculated by deducting depreciation from Gross National Product (GNP)
🔸NNP = GNP – Depreciation
Note-
Factor Cost- Cost incurred to produce goods and service
Market price- For calculating market price we add Indirect taxes and deduct subsidies given by the government in Factor cost.
Market Price = Factor cost + Indirect Taxes – Subsidy
🔸NNP at factor cost = NNP at market price – Indirect taxes + subsidy
🔸Usually, we called NNP at factor cost as National Income.
🔸Likewise, NNP at factor cost, we can also calculate GDP at factor cost.
🔸It is calculated by deducting depreciation from Gross National Product (GNP)
🔸NNP = GNP – Depreciation
Note-
Factor Cost- Cost incurred to produce goods and service
Market price- For calculating market price we add Indirect taxes and deduct subsidies given by the government in Factor cost.
Market Price = Factor cost + Indirect Taxes – Subsidy
🔸NNP at factor cost = NNP at market price – Indirect taxes + subsidy
🔸Usually, we called NNP at factor cost as National Income.
🔸Likewise, NNP at factor cost, we can also calculate GDP at factor cost.