Gross Domestic Product (GDP) exceeds net domestic product by an amount equal to

Question

Quizplus · Accepted Answer

Net domestic product is the measure of the output of the economy minus the depreciation. Hence, GDP exceeds net domestic product by an amount equal to the capital consumption allowance or depreciation. Therefore, option C is the correct answer. Option A is incorrect because indirect taxes are already included in GDP. Option B is incorrect because it adds corporate profits and personal taxes, which is not relevant to the calculation. Option D is incorrect because it subtracts personal taxes from transfer payments, which is not relevant to the calculation of GDP.

Gross Domestic Product (GDP) Exceeds Net Domestic Product by an Amount