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    Question

    Which of the following will have the largest value while calculating national income?

    A Net National Product Correct Answer Incorrect Answer
    B Gross National Product Correct Answer Incorrect Answer
    C Disposable Income Correct Answer Incorrect Answer
    D Personal Income Correct Answer Incorrect Answer

    Solution

    NNP = GNP – Depreciation During production process fixed capital assets like machines, building etc. get depreciated and their value goes down. This is known as normal wear and tear of machinery or consumption of fixed capital or depreciation PI is the Part of National Income (NI) which is received by households. Personal Income (PI) = National Income – Undistributed profits – Net interest payments made by households – Corporate tax + Transfer payments to the households from the government and firms

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