If GDP = 9500 and depreciation = 800, what is NDP?
Answer and explanation
Correct answer: 8700
Net Domestic Product is obtained by subtracting consumption of fixed capital, commonly called depreciation, from Gross Domestic Product. The formula is NDP = GDP − depreciation. Thus, NDP = 9500 − 800 = 8700. The gross figure includes the value needed to replace worn-out capital, whereas the net figure removes that depreciation allowance.
Frequently asked questions
What is the correct answer to this question?
8700
Why is this the correct answer?
Net Domestic Product is obtained by subtracting consumption of fixed capital, commonly called depreciation, from Gross Domestic Product. The formula is NDP = GDP − depreciation. Thus, NDP = 9500 − 800 = 8700. The gross figure includes the value needed to replace worn-out capital, whereas the net figure removes that depreciation allowance.
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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