Economics · National Income Accounting
Why does a capital-intensive growth strategy tend to widen the gap between GDP and Net Domestic Product (NDP) over time?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Because capital-intensive production reduces labour income
- 2Because higher capital stock increases depreciation charges✓
- 3Because such growth reduces indirect tax collections
- 4Because capital-intensive sectors are mostly informal
Correct answer
Because higher capital stock increases depreciation charges
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