Explain the difference between: final and intermediate goods, GDP and GNP, GDP and NDP, and, between...

Explain the difference between: final and intermediate goods, GDP and GNP, GDP and NDP, and, between In and Ig (net private domestic investment and gross private domestic investment)

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Expert Solution

Answer :

Difference between Final & intermediate goods:

Final goods are those goods which are used for ultimate consumption where as intermediate goods are used for further production process.

Difference between GDP & GNP:

Difference between GDP & GNP of a country is shwon in the following way of calculation.

GDP = Personal consumption expenditure + Government expenditure + Investment + Net export ( Total export - Total import)

GNP = Personal consumption expenditure + Government expenditure + Investment + Net export ( Total export - Total import) + Net factor income from abroad ( Total receipts - Total payments)

Difference between GDP & NDP:

Difference between GDP & NDP of a country is shwon in the following way of calculation.

GDP = Personal consumption expenditure + Government expenditure + Investment + Net export ( Total export - Total import)

NDP = GDP - Depreciation

Difference between Gross private domestic investment & net private domestic investment :

Gross domestic private investment = Replacment purchases + net addition to capital assets + investment in inventories

When depreciation charge is deducted from gross private domestic invement then it is called Net private domestic investment

Rahul Sunny answered 1 year ago

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