If GDP at factor cost is 2450 crore rupees and depreciation is 150 crore rupees then what is NDP at factor cost?
Answer and explanation
Correct answer: 2300 crore rupees
NDP is obtained from GDP by deducting depreciation, because gross product includes the amount needed to replace worn-out capital while net product excludes it. The valuation basis remains factor cost throughout: NDP at factor cost = GDP at factor cost − depreciation = 2450 − 150 = 2300 crore rupees. No market-price adjustment is needed.
Frequently asked questions
What is the correct answer to this question?
2300 crore rupees
Why is this the correct answer?
NDP is obtained from GDP by deducting depreciation, because gross product includes the amount needed to replace worn-out capital while net product excludes it. The valuation basis remains factor cost throughout: NDP at factor cost = GDP at factor cost − depreciation = 2450 − 150 = 2300 crore rupees. No market-price adjustment is needed.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
Student feedback
Was this question useful?
👍 0 Helpful 👎 0 Not helpful
Yes 0% No 0%
0 responsesStudent Reviews
No published reviews yet.
