Which of the following is a difference between net domestic product (NDP)and gross domestic product (GDP)?
A)GDP includes the cost of polluting the environment,while NDP does not.
B)GDP excludes net taxes,while NDP includes it.
C)GDP excludes that part of the capital stock used up in the production process,while NDP includes it.
D)GDP includes all government spending,while NDP excludes government spending.
E)GDP includes that part of the capital stock used up in the production process,while NDP does not.

Question

Quizplus · Accepted Answer

The main difference between NDP and GDP is that GDP includes the depreciation of capital stock (i.e. the part of the capital stock used up in the production process), while NDP does not. This is because NDP measures the value of economic output that remains after accounting for the depreciation of the capital stock. Option A is not correct because both GDP and NDP exclude the cost of environmental pollution. Option B is not correct because NDP includes net taxes (i.e. taxes minus subsidies) while GDP excludes them. Option D is not correct because both GDP and NDP include government spending.

Which of the Following Is a Difference Between Net Domestic