$$\begin{array} { | l | c | }
\hline \text { Government Purchases } & \$ 15 \
\hline \text { Consumption } & 90 \
\hline \text { Gross Investment } & 20 \
\hline \text { Consumption of Fixed Capital (depreciation) } & 5 \
\hline \text { Exports } & 8 \
\hline \text { Imports } & 12 \
\hline
\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). NDP (net domestic product) is
A) $116.
B) $121.
C) $125.
D) $150.

Question

$$\begin{array} { | l | c | } 
\hline \text { Government Purchases } & \$ 15 \
\hline \text { Consumption } & 90 \
\hline \text { Gross Investment } & 20 \
\hline \text { Consumption of Fixed Capital (depreciation) } & 5 \
\hline \text { Exports } & 8 \
\hline \text { Imports } & 12 \
\hline
\end{array}$$ Refer to the accompanying data (all ?gures in billions of dollars). NDP (net domestic product) is
A) $116.
B) $121.
C) $125.
D) $150.

Quizplus · Accepted Answer

NDP is calculated as GDP minus depreciation. GDP is the sum of government purchases, consumption, gross investment, and net exports (exports minus imports). From the data, GDP = $15 (government purchases) + $90 (consumption) + $20 (gross investment) + ($8 exports - $12 imports) = $15 + $90 + $20 - $4 = $121. Subtracting depreciation ($5) from GDP gives NDP = $121 - $5 = $116.

Refer to the Accompanying Data (All ?Gures in Billions of