Answer to Question #224334 in Macroeconomics for Zainab

Question

What is NDP? Is it a better or worse measure of output than GDP? Explain

Answer 1

NDP is the value of net output of the economy, calculated as gross domestic product (GDP) minus the consumption of fixed capital (CFC).

Because the former also reflects the amount of expenditure spent improving outmoded equipment to maintain the production level, net domestic product is sometimes considered a stronger economic indicator than GDP.