alleryStart learning →Net Domestic Product is calculated as:
AGDP minus depreciation
BGDP plus net factor income
CGNP minus indirect taxes
DGNP plus subsidies received
Answer & Solution
Correct answer: A. GDP minus depreciation
1. NDP is the value of the net output of the economy during the year.
2. Some of a country's capital equipment wears out or becomes outdated each year during production.
3. Allowing for that wear and tear, Net Domestic Product equals GDP minus depreciation.
4. Adding net factor income from abroad instead moves you from a domestic measure to a national one, which is a separate step.
_Source: TN HSC Class 12 Economics (Samacheer Kalvi, Govt of Tamil Nadu), Ch 2 "National Income", §2.4.1_
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