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Question
Which of the following is not included while calculating net national income?
Which of the following is not included while calculating net national income?
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Solution
The correct option is B Depreciation
National income generally refers to the income earned by a nation's people and businesses in a year.
Gross national income (GNI) refers to the income earned by the factors of production such as rent from land, wages from labour, interest from capital, and profits from entrepreneurs.
Depreciation refers to the monetary value of capital assets such as machines and tools, which decreases over a period of time due to wear, tear, and obsolescence.
Subtracting depreciation from the gross national income gives us the net national income of the country. It can be expressed as:
Net national income = Gross national income – Depreciation
National income generally refers to the income earned by a nation's people and businesses in a year.
Gross national income (GNI) refers to the income earned by the factors of production such as rent from land, wages from labour, interest from capital, and profits from entrepreneurs.
Depreciation refers to the monetary value of capital assets such as machines and tools, which decreases over a period of time due to wear, tear, and obsolescence.
Subtracting depreciation from the gross national income gives us the net national income of the country. It can be expressed as:
Net national income = Gross national income – Depreciation
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