Net domestic product equals gross domestic product minus the capital consumption allowance.

Question

Quizplus · Accepted Answer

Net domestic product (NDP) is calculated by subtracting the capital consumption allowance from the gross domestic product (GDP). The capital consumption allowance represents the depreciation of capital assets used in the production process. Therefore, NDP gives a measure of economic output that takes into account the need to replace worn-out capital assets.

Net Domestic Product Equals Gross Domestic Product Minus the Capital