Which among the following statements are true with regard to use of the concept of NetDomestic Produ...........

Economic Affairs Growth and Indicators

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Which among the following statements are true with regard to use of the concept of NetDomestic Product (NDP)?

1. To show the achievements of the economy in research and development to cut down levels ofdepreciation.

2. It is used in comparative analysis to compare the economies of the world.

Choose the correct answer:

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

Explanation:

• Since, Net Domestic Product (NDP) is the GDP calculated after adjusting the weight of thevalue of ‘depreciation’, statement (1) seems correct.
• Statement (2) can be eliminated as we always read about GDP in newspapers or any studieswhen they compare the economies of the world.
The different uses of the concept of NDP are as given below:
• For domestic use only – to understand the historical situation of the loss due to depreciation tothe economy. Also used to understand and analyse the sectoral situation of depreciation inindustry and trade in comparative periods.
• To show the achievements of the economy in the area of research and development which havetried cutting the levels of depreciation in a historical time period.