NNP at Market Price

When goods and services are produced, there is some wear and tear of the machines or fixed capital. This wear and tear of the machine is called consumption of fixed capital or depreciation. If we deduct the value of depreciation from the value of GNP, we get what is called ‘net national product.’

Definition

According to Peterson, “Net National Product at Market Price is the market value of the output of final goods and services produced by normal residents of an economy in its domestic territory an accounting year exclusive of depreciation and inclusive of net factor income from abroad.”