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Which of the following best represents the concept of Net Domestic Product (NDP)?
GDP - Income from abroad
GDP + Income from abroad
GNP - Depreciation
GDP - Depreciation
- Option 1: GDP - Income from abroad
- This subtracts the income earned abroad from the GDP. It doesn't relate to NDP.
- Option 2: GDP + Income from abroad
- Adding income from abroad to GDP calculates GNP, not NDP.
- Option 3: GNP - Depreciation
- GNP accounts for the total value of goods and services produced by a country's residents. Subtracting depreciation gives you the Net National Product (NNP), not NDP.
- Option 4: GDP - Depreciation
- This calculation subtracts depreciation from GDP, which provides the Net Domestic Product (NDP). NDP represents the net output of the economy, reflecting the value of goods and services after accounting for the loss of value in capital goods.
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