GDP exceeds net domestic product by an amount equal to
A)indirect business taxes.
B)corporate profits plus personal taxes.
C)the capital consumption allowance (depreciation).
D)transfer payments minus personal taxes.

Question

Quizplus · Accepted Answer

GDP measures the total value of goods and services produced in an economy within a given time period, while net domestic product (NDP) measures the value of output after accounting for wear and tear on capital goods. The difference between GDP and NDP is the capital consumption allowance, which represents the depreciation of capital goods used in production. Therefore, the correct answer is (C) the capital consumption allowance (depreciation).

GDP Exceeds Net Domestic Product by an Amount Equal to