Multiple choice

Net National Income at market prices is equal to

  1. Gross National Income at market prices minus depreciation

  2. Net Domestic product at factor price plus or minus earnings from abroad

  3. Gross Domestic product minus indirect taxes and subsidies

  4. Gross National Product

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A Correct answer
Explanation

Net National Income (NNI) at market prices equals Gross National Income (GNI) at market prices minus depreciation (consumption of fixed capital). Depreciation represents the wear and tear of capital assets during production. NNI is the true measure of national income available for consumption and addition to capital stock after maintaining existing capital.

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