If GDP is ₹1000 crore and depreciation is ₹100 crore, what is NDP?
Answer and explanation
Correct answer: ₹900 crore
NDP is calculated by subtracting depreciation from GDP because GDP is a gross measure and NDP is a net measure. Thus, NDP = GDP − depreciation = ₹1000 crore − ₹100 crore = ₹900 crore. ₹1100 crore would incorrectly add depreciation, while ₹1000 crore simply repeats GDP without making the gross-to-net adjustment.
Frequently asked questions
What is the correct answer to this question?
₹900 crore
Why is this the correct answer?
NDP is calculated by subtracting depreciation from GDP because GDP is a gross measure and NDP is a net measure. Thus, NDP = GDP − depreciation = ₹1000 crore − ₹100 crore = ₹900 crore. ₹1100 crore would incorrectly add depreciation, while ₹1000 crore simply repeats GDP without making the gross-to-net adjustment.
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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