Which of the Following Is a Difference Between Net Domestic

question 197

Multiple Choice

Which of the following is a difference between net domestic product (NDP) and gross domestic product (GDP) ?

• A) GDP includes the cost of polluting the environment, while NDP does not.
• B) GDP excludes net taxes, while NDP includes it.
• C) GDP excludes the part of the capital stock used up in the production process, while NDP includes it.
• D) GDP includes all government spending, while NDP excludes government spending.
• E) GDP includes the part of the capital stock used up in the production process, while NDP does not.

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Definitions:

Fixed Manufacturing Cost

Expenses that do not vary with the level of production output, including salaries of managers, lease payments, and maintenance.

Units Produced

The total number of units of product manufactured during a specific time frame.

Manufacturing Overhead Costs

These are indirect costs related to manufacturing that cannot be directly traced to specific units produced, such as utilities or maintenance expenses.

September

In the Gregorian calendar, it is the month that falls ninth in the sequence.