Multiple choice

NDP is GDP minus

  1. depreciation

  2. indirect taxes

  3. subsidies

  4. NNP

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A Correct answer
Explanation

NDP (Net Domestic Product) is GDP minus depreciation (consumption of fixed capital). Depreciation represents the wear and tear or obsolescence of capital assets during production. NDP gives a clearer picture of the actual net value added by excluding this capital consumption. Indirect taxes and subsidies are used to convert between market price and factor cost, not to derive NDP.

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