NNI accounts for capital depreciation unlike GNI

Steps:

• GNI measures total income earned by residents, including abroad, before capital wear.
• NNI calculates sustainable income by subtracting depreciation from GNI.
• NNI < GNI shows depreciation exceeds zero, indicating capital asset value loss.
• This reflects net depreciation in fixed capital assets.

Why D is correct:

• By definition, NNI = GNI - depreciation allowance, so NNI < GNI means positive net depreciation in fixed assets.

Why the others are wrong:

• A: Relates to net factor income from abroad, which distinguishes GNI from GDP, not NNI from GNI.
• B: Inflation affects nominal values but does not create the NNI-GNI difference, which is due to depreciation.
• C: Exports contribute to both NNI and GNI equally; they do not explain the net-gross distinction.

Final answer: D