If a country's NDP at market price is 3100 and depreciation is 500, what is its GDP at market price?
Answer and explanation
Correct answer: 3600
Net domestic product is obtained after deducting depreciation from gross domestic product. Therefore, the relationship is GDP at market price = NDP at market price + depreciation. Substituting the values gives GDPMP = 3100 + 500 = 3600. Option A would incorrectly subtract depreciation and would produce NDP from GDP, not GDP from NDP.
Frequently asked questions
What is the correct answer to this question?
3600
Why is this the correct answer?
Net domestic product is obtained after deducting depreciation from gross domestic product. Therefore, the relationship is GDP at market price = NDP at market price + depreciation. Substituting the values gives GDPMP = 3100 + 500 = 3600. Option A would incorrectly subtract depreciation and would produce NDP from GDP, not GDP from NDP.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - NDP.
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