If Net Domestic Product and depreciation are given, how will Gross Domestic Product be found?
Answer and explanation
Correct answer: By adding depreciation to net domestic product
NDP is GDP after depreciation has been deducted. To reverse that deduction and recover the gross figure, add depreciation: GDP = NDP + depreciation. Subtracting depreciation again would move farther from GDP and give an incorrect smaller value. The remaining options either ignore NDP or fail to use the required gross-net accounting relationship.
Frequently asked questions
What is the correct answer to this question?
By adding depreciation to net domestic product
Why is this the correct answer?
NDP is GDP after depreciation has been deducted. To reverse that deduction and recover the gross figure, add depreciation: GDP = NDP + depreciation. Subtracting depreciation again would move farther from GDP and give an incorrect smaller value. The remaining options either ignore NDP or fail to use the required gross-net accounting relationship.
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.
