What is the full form of GDP?
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What is the full form of GDP?
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The full form of GDP is Gross Domestic Product. GDP is the total value of all the Final goods, products, and services produced in a country in a specific time period. It measures the overall growth of the economy or the decline of the economy of the country. GDP indicates the standard of living and inflation rate of the nation. A nation having great GDP is considered as a good nation for living reason.
India is the fastest-growing economy in the world with the fifth-largest economy overall, industry, service sector, and agriculture including allied services are the major sector which contributes to GDP.
Major components of GDP
1. Consumption
2. Investment
3. Government spending
4. Exports
5. Imports
How to calculate GDP
1. Expenditure Approach
GDP = C + G + I + NX
C = Consumpation
G = Total government expenditures
I = Investments
NX = Net exports
2.Income Approach
GDP = Total National Income + Sales Taxes + Depreciation + Net Foreign Factor Income
Types of GDP
Real Gross Domestic Product- It measures economic output after inflation has been affecting the account. It gives a realistic assessment of economic growth.
Formula
Real GDP = Nonimal GDP/Deflator
Nominal Gross Domestic Product- NGDP assesses the current market price. It includes all of the changes in market prices that have occurred in the current year due to inflation or deflation.
Formula
GDP= C+I+G+(X-M)
C – Private consumption
I – Gross investment
G – Government investment
X – Exports
M – Imports
