Net Domestic Product (NDP) measures the total value of all goods and services produced within a country, adjusted for depreciation. It reflects the economic performance of a nation by accounting for the wear and tear on capital goods, such as machinery and buildings, which are used in production. NDP is calculated by subtracting depreciation from the Gross Domestic Product (GDP). This figure helps policymakers and economists understand the true growth of an economy, as it provides a clearer picture of how much value is being added over time, considering the loss of capital.