Net domestic product (NDP) is GDP minus depreciation, giving a more accurate measure of a nation’s economic health. Gross domestic product (GDP) measures a country’s output, while gross national product (GNP) includes income from abroad. Gross domestic income (GDI) measures revenues earned during production.
In economics, net domestic product (NDP) is the measurement of a nation’s economic activity which is calculated by subtracting depreciation from gross domestic product (GDP). The net domestic product takes into account the capital consumed during the year; this depreciation is often referred to as the capital burn allowance, which represents the amount of money needed to replace the assets that have been used up. Some economists view net domestic product as a more accurate way to measure the health of the economy than gross domestic product; therefore, it is typically used more often.
GDP is the value of services and finished products that are produced within a country’s borders during a specific period of time, usually a year. GDP includes all government outlays, public and private consumption, investment, and exports less imports. Sometimes, gross domestic product is used to measure a country’s standard of living. It can be used as an indicator of a country’s economic health, although some economists argue that GDP serves as a measure of a nation’s productivity and not its material well-being.
Net domestic product is an estimate of the amount of money a country needs to spend to maintain current gross domestic product. If a country is unable to replace capital lost through depreciation, gross domestic product will decline. A large gap between gross domestic product and net domestic product can indicate the possible obsolescence of capital goods. Alternatively, a narrowing gap would likely mean that the country’s capital conditions are improving.
Gross Domestic Income (GDI) is another statistic used by the Federal Reserve to measure a country’s economic activity. GDI is based on all revenues earned during the production of goods and services within a country’s borders. It is different from gross domestic product, which is a measure of spending.
Gross National Product (GNP) is the total value from domestic and foreign sources that a country’s residents claim. It is the value of goods and services produced within a country, plus the net income received by residents from abroad. Economists use all of these different factors to analyze a country’s output and income to get a fairly accurate picture of the state of that country’s economy.
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