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Finance Dictionary and Glossary of Investment Terms
Net Domestic Product
An annual measure of the economic output of a nation that is adjusted to account for depreciation, calculated by subtracting depreciation from the gross domestic product (GDP).
The GDP minus depreciation on a country's capital goods. This measure allows users of the country's national accounts to estimate how much the country has to spend just to maintain their current GDP. If the country is not able to replace the capital stock lost through depreciation, then GDP will fall. In addition, a growing gap between GDP and Net Domestic Product indicates increasing obsolescence of capital goods, while a narrowing gap would mean that the condition of capital stock in the country is improving.