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Which of the following equation is appropriate for determining the Net Domestic Product (NDP)  

Economics
JAMB 2025

Which of the following equation is appropriate for determining the Net Domestic Product (NDP)

 

  • A. NDP = GNP - depreciation
  • B. NDP = GDP - depreciation
  • C. NDP = GDP x Net Income from abroad
  • D. NDP - GDP + Net Income from abroad
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Correct Answer: Option B
Explanation

The correct equation for determining the Net Domestic Product (NDP) is NDP = GDP - depreciation. Gross Domestic Product
(GDP) is the total value of all goods and services produced within a country in a given period. Depreciation is the decrease in the
value of physical capital - that is, the amount of value that is 'used up' or consumed in the process of producing the GDP. Therefore,
to get the Net Domestic Product (NDP), which is the value of the GDP after accounting for depreciation, we subtract the
depreciation from the GDP.


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