WAEC Economics 2010 Paper

Concept:Net Domestic Product (NDP) measures the total value of goods and services produced within a country after allowing for depreciation.Explanation:Step 1: Gross Domestic Product (GDP) is the total market value of all final goods and services produced within the geographical borders of a country in a given time period.Step 2: Depreciation is the wear and tear, or the reduction in the value of capital assets such as machinery, equipment, and buildings, that occurs during the process of production.Step 3: To derive the Net Domestic Product, the value of depreciation is subtracted from the Gross Domestic Product.So the correct equation is $\text{NDP} = \text{GDP} - \text{Depreciation}$.Option A is not correct because subtracting depreciation from Gross National Product (GNP) gives the Net National Product (NNP).Option B is not correct because $\text{GDP} + \text{Net Income from abroad}$ equals Gross National Product (GNP), not NDP.Option D is not correct because multiplying GDP by Net Income from abroad is not a meaningful or recognised formula in national income accounting.Thus, only Option C correctly defines Net Domestic Product.Answer:C. $\text{NDP} = \text{GDP} - \text{Depreciation}$.