If GDP is ₹1500 crore and depreciation is ₹200 crore, what will be NDP?
Answer and explanation
Correct answer: ₹1300 crore
Net Domestic Product is obtained by subtracting consumption of fixed capital, commonly called depreciation, from Gross Domestic Product. Thus, NDP = GDP − depreciation = ₹1500 crore − ₹200 crore = ₹1300 crore. Depreciation is subtracted because the value of capital used up during production must be excluded from the net measure.
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What is the correct answer to this question?
₹1300 crore
Why is this the correct answer?
Net Domestic Product is obtained by subtracting consumption of fixed capital, commonly called depreciation, from Gross Domestic Product. Thus, NDP = GDP − depreciation = ₹1500 crore − ₹200 crore = ₹1300 crore. Depreciation is subtracted because the value of capital used up during production must be excluded from the net measure.
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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