Answer to Question #317483 in Macroeconomics for vina

Question

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

Answer 1

NDP is the annual measure of the economic output of a nation.

NDP is much better than GDP. This is because GDP has become less useful due to changes in capital intensity and need to write off capital stock hence NDP has become the most appropriate measure for calculating the potential for increases of real wages and profits.