Net Domestic Product (NDP)

Net domestic product (NDP) is the total value of goods and services produced within a country's borders in a given year, minus depreciation. It is a measure of a country's economic output and is often used to compare the economic performance of different countries.

NDP is calculated by adding up the value of all final goods and services produced within a country's borders in a given year. Final goods and services are those that are sold to the end user, rather than being used as inputs into other products.

To calculate NDP, economists start by adding up the value of all gross domestic product (GDP). GDP is the total value of all goods and services produced within a country's borders, regardless of whether they are sold to domestic or foreign buyers.

From GDP, economists subtract depreciation, which is the value of capital goods that wear out or become obsolete over time. Depreciation is subtracted from GDP because it represents a cost to businesses, but it does not represent a new addition to the economy.

The resulting figure is NDP. NDP is a more accurate measure of a country's economic output than GDP because it takes into account the depreciation of capital goods.

NDP is an important economic indicator because it can be used to track a country's economic growth. A growing NDP indicates that the economy is expanding and that more goods and services are being produced. A shrinking NDP indicates that the economy is contracting and that fewer goods and services are being produced.

NDP can also be used to compare the economic performance of different countries. Countries with a higher NDP per capita (NDP divided by population) are generally considered to be more prosperous than countries with a lower NDP per capita.

Net domestic product is a key measure of a country's economic performance. It is calculated by adding up the value of all final goods and services produced within a country's borders in a given year, minus depreciation. NDP is a more accurate measure of a country's economic output than GDP because it takes into account the depreciation of capital goods.