Statement I: NNP at market prices is equal to GNP at market prices minus depreciation.
Statement II: NNP at market prices measures only the output produced within the domestic territory of a country.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Statement I is true but Statement II is false.
Statement I: NNP at market prices is equal to GNP at market prices minus depreciation. — True. NNPMP = GNPMP − depreciation.
Statement II: NNP at market prices measures only the output produced within the domestic territory of a country. — False. NNP measures output regardless of where it is produced, in the domestic territory or abroad.
NCERT (2026-27): “Gross National Product (GNP) … If we deduct depreciation from GNP the measure of aggregate income that we obtain is called Net National Product (NNP). Thus NNP ≡ GNP – Depreciation” “Table 2.4: Basic National Income Aggregates … NNP measures output regardless of where that production has taken place (in domestic territory or abroad).” |