Final answer:
Depreciation in the national income accounts is called "consumption of fixed capital," and it reflects the loss in value of physical capital due to wear and aging over the course of a year.
Step-by-step explanation:
In the national income accounts, depreciation is referred to as "consumption of fixed capital." This is the value of the portion of the capital assets that has been used up or has aged and thus declined in value over a year. We calculate net national product (NNP) by taking the gross national product (GNP) and subtracting this value, which signifies the amount of physical capital worn out or reduced in value due to aging.
National income further elaborates on the NNP and includes income to businesses and individuals, while personal income includes only income to people. The understanding of these terms is vital for interpreting and analyzing economic health and activity.