How Does Net Domestic Product (NDP)differ from Gross Domestic Product

question 147

Multiple Choice

How does net domestic product (NDP) differ from gross domestic product (GDP) ?

• A)GDP includes expenditures for gross products that pollute the environment; NDP does not.
• B)GDP is gross because it values spending on each good and service in dollar terms; NDP excludes taxes.
• C)GDP includes exports; NDP omits exports.
• D)GDP includes all government spending; NDP subtracts taxes.
• E)GDP includes that part of the capital stock used up in the production process; NDP does not.

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Definitions:

Gross Return

The total return on an investment before any deductions are made for costs or expenses.

Managed Investment Companies

Firms that invest pooled funds from clients, taking on the responsibility of investment decisions and management for those funds.

Closed-end Funds

Investment funds that have a fixed number of shares which are not redeemable from the fund. Instead, the shares can be purchased or sold only in the market, at their current market price.

Unit Investment Trusts

An investment company offering a fixed portfolio of securities in a one-time public offering, with units redeemable on demand.