Net National Product (NNP) is calculated by subtracting depreciation from Gross National Product (GNP). Depreciation is a measure of the wear and tear on a country's capital goods, such as buildings, machinery, and equipment, over a certain period of time.
In other words, NNP takes into account the decrease in value of a country's capital goods, which are used to produce goods and services, over time. By subtracting depreciation, NNP gives a more accurate picture of a country's economic performance, as it reflects the actual production of goods and services, rather than just the value of the capital goods used to produce them.