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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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