If GDP increases by ₹800 crore and depreciation increases by ₹300 crore, how much will NDP increase?
Answer and explanation
Correct answer: ₹500 crore
The relationship is NDP = GDP − depreciation. Therefore, the change in NDP equals the change in GDP minus the change in depreciation: ΔNDP = ΔGDP − Δdepreciation = ₹800 crore − ₹300 crore = ₹500 crore. Option B is correct. Option C ignores the additional depreciation, option A treats depreciation as the entire change, and option D incorrectly adds both changes.
Frequently asked questions
What is the correct answer to this question?
₹500 crore
Why is this the correct answer?
The relationship is NDP = GDP − depreciation. Therefore, the change in NDP equals the change in GDP minus the change in depreciation: ΔNDP = ΔGDP − Δdepreciation = ₹800 crore − ₹300 crore = ₹500 crore. Option B is correct. Option C ignores the additional depreciation, option A treats depreciation as the entire change, and option D incorrectly adds both changes.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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