# NNP at factor cost formula

; Net Foreign Factor Income = Income earn by a foreign factor like the amount of foreign company or foreign person earn from the country and it is also the difference between a country citizen and country earn. Mathematically NNP written as-NNP = GNP – Depreciation. International Monetary Fund (IMF) and World Bank both uses this technique to rank any country in growth rate list.Gross Domestic Product is the total summation of the outcome of Consumption of goods or services, Investment in production or stakes, Government Expenditure and Net outcome from Export & Import.GDP includes income generated by foreigners within the boundary of the nation, whereas money coming from abroad does not include in the calculation of GDP.The difference between Gross Domestic Product and Depreciation gives Net Domestic Product.Depreciation constitutes all the wear and tear or any other damages to the final product. What are the major parameters to determine growth rate of any Economy? We can find the per capita income of a country if we know the NNP and total population. It differs from NNP at … (NNP/ total Population) = per capita income National income calculated by considering two major cost factors, which are listed as follows: Factor Cost- It constitutes production cost which includes cost of raw materials, machine cost, salary and many more things at ground level. NNP or Net National Product. NNP= GNP – Depreciation Or, NNP= GDP+ income from abroad- depreciation. Our mission is to liberate knowledge. NNP is measured at factor cost. Where, Total national income = Sum of rent, salaries profit. within the domestic territory of a country. ; Depreciation = the decrease in the value of an asset. They can further acquire help and in-depth knowledge of … Let’s discuss each of the components separately in details:GDP calculation is the most fundamental quantitative technique to determine the internal strength of any economy in terms of its national income. Question: What's NNP (Net National Product) at factor cost? e.g. Net national product 10 at market price is Gross national product at market price minus depreciation. Depreciation includes all the associated wear and tear to the commodities at national level.National income calculated by considering two major cost factors, which are listed as follows:NNP (Factor Cost) = NNP (Market Cost) + Subsidies – Indirect taxNet National Product at Factor cost divided by total population of the country gives Per capita income.Subscribe to our mailing list and get interesting stuff and updates to your email inbox.we respect your privacy and take protecting it seriouslyWriting blogs is my passion so I started writing on different niche. In this report, it mentioned all the economic activities that added value to the income of the nation.We calculate national income mainly through Gross Domestic Product (GDP), Net Domestic Product (NDP), Gross National Product (GNP) and Net National Product (NNP).
You will become the basic analyst who can understand the appreciation and depreciation of an economy after you finish thorough reading of this article. So how people determine appreciation and depreciation rate of any economy?