NDP = _________.

Question

NDP = _________.

Accepted Answer

Step 1 — Definitions:

- GDP = Gross Domestic Product (total value of goods and services produced within a country).
- Depreciation (consumption of fixed capital) = value of capital used up in production.
- NDP = Net Domestic Product.

Step 2 — Formula:

By definition, net measures are gross measures minus depreciation. Thus

$	ext{NDP} = 	ext{GDP} - 	ext{Depreciation}$.

Step 3 — Eliminate other options:

- (2) $	ext{GDP} + 	ext{Depreciation}$ would be larger than GDP (nonsense for a "net" measure).
- (3) and (4) involve net factor income from abroad, which relate to the difference between domestic and national measures (GNP/NNP), not to converting gross to net.

Therefore the correct choice is option (1), corresponding to (a).

FINAL_ANSWER: a

Answer

Answer

Answer