If NDP is ₹7,500 crore and depreciation is ₹900 crore, what will be GDP?
Answer and explanation
Correct answer: ₹8,400 crore
The governing relationship is GDP = NDP + depreciation because NDP is the net measure after deducting consumption of fixed capital, whereas GDP is the gross measure before that deduction. Substituting the values gives GDP = ₹7,500 crore + ₹900 crore = ₹8,400 crore. Therefore, option C is correct. Option B merely repeats NDP, while option A subtracts depreciation in the wrong direction.
Frequently asked questions
What is the correct answer to this question?
₹8,400 crore
Why is this the correct answer?
The governing relationship is GDP = NDP + depreciation because NDP is the net measure after deducting consumption of fixed capital, whereas GDP is the gross measure before that deduction. Substituting the values gives GDP = ₹7,500 crore + ₹900 crore = ₹8,400 crore. Therefore, option C is correct. Option B merely repeats NDP, while option A subtracts depreciation in the wrong direction.
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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