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The difference between the GNP and the NNP is equal to the
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- consumer expenditure on durable goods
- direct tax revenue
- indirect tax revenue
- capital depreciation
- consumer expenditure on durable goods
Correct Option: D
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with the matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
