If NDP is 480 and depreciation is 70, what will GDP be?
Answer and explanation
Correct answer: 550
Net Domestic Product is obtained by deducting depreciation from Gross Domestic Product. Therefore, to recover the gross measure, depreciation must be added back: GDP = NDP + depreciation = 480 + 70 = 550. Subtracting 70 would move in the wrong direction and give 410, while 480 and 70 are only the separate figures supplied in the question.
Frequently asked questions
What is the correct answer to this question?
550
Why is this the correct answer?
Net Domestic Product is obtained by deducting depreciation from Gross Domestic Product. Therefore, to recover the gross measure, depreciation must be added back: GDP = NDP + depreciation = 480 + 70 = 550. Subtracting 70 would move in the wrong direction and give 410, while 480 and 70 are only the separate figures supplied in the question.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
