b. If you were to determine net domestic product (NDP) through the expenditures approach, the appropriate measure of investment spending to use is multiple choice 2gross private domestic investment, because it adds in depreciation.gross private domestic investment, because it subtracts off depreciation.net private domestic investment, because it subtracts off depreciation.net private domestic investment, because it adds in depreciation.
Question
b. If you were to determine net domestic product (NDP) through the expenditures approach, the appropriate measure of investment spending to use is multiple choice 2gross private domestic investment, because it adds in depreciation.gross private domestic investment, because it subtracts off depreciation.net private domestic investment, because it subtracts off depreciation.net private domestic investment, because it adds in depreciation.
Solution
The correct answer is "net private domestic investment, because it subtracts off depreciation." This is because Net Domestic Product (NDP) is calculated by subtracting depreciation from Gross Domestic Product (GDP). Therefore, when using the expenditures approach to calculate NDP, you would use net private domestic investment, which already has depreciation subtracted.
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