Asked by Dayna McCormick on May 17, 2024
Verified
Which one of these is correct?
A) GDP - depreciation = Net Domestic Product
B) National income + depreciation = Net Domestic Product
C) Wages + rent + indirect business taxes = national income
D) National income - indirect business taxes = Net Domestic Product
Net Domestic Product
A measure of a nation's total economic output, adjusted for depreciation; it is the gross domestic product (GDP) minus the depreciation on a country’s capital goods.
National Income
The total amount of money earned within a country from the production of goods and services over a specified period, usually a year.
- Identify the differences between Gross Domestic Product and Net Domestic Product, and recognize the importance of depreciation.
Verified Answer
AC
Alexis CarrollMay 24, 2024
Final Answer :
A
Explanation :
GDP (Gross Domestic Product) minus depreciation equals Net Domestic Product (NDP). Depreciation accounts for the wear and tear on an economy's capital goods, and subtracting it from GDP gives the NDP, which represents the net value of goods and services after accounting for capital depreciation.
Learning Objectives
- Identify the differences between Gross Domestic Product and Net Domestic Product, and recognize the importance of depreciation.