What is the full form of GDP?
The Gross Domestic Product (GDP) is the total market value of all the products and services produced in a specific country at specific time.
By calculating the GDP, a country get to know about it's economic health.
Commonly, it is measured after every 1 year, but in India, it is measured after every three months.
Few years back, education, health, computer, and banking sectors were added for calculating it.
By calculating the GDP, a country get to know about it's economic health.
Commonly, it is measured after every 1 year, but in India, it is measured after every three months.
Few years back, education, health, computer, and banking sectors were added for calculating it.
Types of GDP
There are two types of GDP:
- Nominal GDP
- Real GDP
Nominal GDP is the sum of all the figures at current prices, but in Real GDP, the effect of inflation is also measured.
Means if the price of a commodity increases by $10 and the inflation rate is 6% then the increase in the real value will be considered as 4%.
Means if the price of a commodity increases by $10 and the inflation rate is 6% then the increase in the real value will be considered as 4%.
How is GDP calculated?
The International standard for measuring GDP is set in the Book System of National Accounts (1993), called SNA93.
It has prepared by representatives of the International Monetary Fund (IMF), the European Union (EU), the Organization for Economic Cooperation and Development (OECD), the United Nations and the World Bank.
It has prepared by representatives of the International Monetary Fund (IMF), the European Union (EU), the Organization for Economic Cooperation and Development (OECD), the United Nations and the World Bank.
GDP is accessed within the borders of the country. The calculation is done on the basis of all production of the country. It also includes the services.
First introduction of GDP
Between 1654 to 1676, due to the fight between the Dutch and the British over unfair tax system, William Petty introduced the similar concept of GDP.
However, the modern concept of GDP was introduced by Simon Kunget for US Congress Report in 1934.
However, the modern concept of GDP was introduced by Simon Kunget for US Congress Report in 1934.
After the Bretton Woods Conference held in 1944, the use of GDP began for measuring the country's economy.
Earlier, the income of people living in the country or outside the country was added, which is now called as the Gross National Product.
Earlier, the income of people living in the country or outside the country was added, which is now called as the Gross National Product.
Who calculates GDP?
Central Statistics Office under the Ministry of Statics and Program implementation has the responsibility to calculate the GDP of the country.
It is the office which collects all the data from all over the country and calculates the GDP figures.
It is the office which collects all the data from all over the country and calculates the GDP figures.
Effect of GDP on common people
GDP adversely affects the life of common people. The effect of low GDP rate is mostly seen on poor people.
When the GDP of a country is continuously low, it is considered as a great danger signal.
Due to low GDP the average income of the people in the area goes down. Also, the creation of new jobs decreases.
Due to the economic slowdown, people are fired from their jobs and the savings and investment of people goes on decreasing.
When the GDP of a country is continuously low, it is considered as a great danger signal.
Due to low GDP the average income of the people in the area goes down. Also, the creation of new jobs decreases.
Due to the economic slowdown, people are fired from their jobs and the savings and investment of people goes on decreasing.
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