When depreciation is deducted from Gross National Product, the result is
Answer Details
When depreciation is deducted from Gross National Product (GNP), the result is Net National Product (NNP). Depreciation is the amount of capital goods that have worn out or been used up during the production process, and it represents a decrease in the value of the economy's stock of physical capital. Deducting depreciation from GNP gives us NNP, which is the value of the nation's final output of goods and services minus the amount of capital that has been used up or worn out during the production process. In other words, NNP is a measure of the economy's net output or income after accounting for the depreciation of its physical capital.