What is subtracted from GDP to arrive at NDP?

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Accepted Answer

Step-by-step explanation:

1. Definitions:
   - GDP = Gross Domestic Product.
   - NDP = Net Domestic Product.
   - Depreciation (capital consumption allowance) = the value of capital used up in production.

2. Relationship:
   - By definition, $	ext{NDP} = 	ext{GDP} - 	ext{Depreciation}$.

3. Evaluate the given items:
   - (2) Depreciation is explicitly subtracted from GDP to get NDP.
   - (1) Subsidies are not subtracted to get NDP.
   - (3) Net indirect taxes are used when moving between GVA and GDP, not subtracted to form NDP.
   - (4) Net factor income from abroad is used to convert between GDP and GNP (or GNI), not to get NDP.

Therefore only (2) is subtracted from GDP to arrive at NDP.

FINAL_ANSWER: b

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