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    Gross Domestic Product

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    Lakshmi
    Gross Domestic Product (GDP) is a monetary measure of the value of all final goods and services produced within a country in a given period. GDP is calculated using two methods: the expenditure method which looks at what is produced and purchased, and the income method which looks at total value as the sum of all parts including consumption, investment, government spending, and net exports. GDP is used to determine the economic performance and international comparisons of countries and regions.

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    Gross Domestic Product

    Uploaded by

    Lakshmi
    33 views13 pages
    Gross Domestic Product (GDP) is a monetary measure of the value of all final goods and services produced within a country in a given period. GDP is calculated using two methods: the expenditure method which looks at what is produced and purchased, and the income method which looks at total value as the sum of all parts including consumption, investment, government spending, and net exports. GDP is used to determine the economic performance and international comparisons of countries and regions.

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    Gross Domestic Product (GDP) is a monetary measure of the value of all final goods and services produced within a country in a given period. GDP is calculated using two methods: the expenditure method which looks at what is produced and purchased, and the income method which looks at total value as the sum of all parts including consumption, investment, government spending, and net exports. GDP is used to determine the economic performance and international comparisons of countries and regions.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    33 views13 pages

    Gross Domestic Product

    Uploaded by

    Lakshmi
    Gross Domestic Product (GDP) is a monetary measure of the value of all final goods and services produced within a country in a given period. GDP is calculated using two methods: the expenditure method which looks at what is produced and purchased, and the income method which looks at total value as the sum of all parts including consumption, investment, government spending, and net exports. GDP is used to determine the economic performance and international comparisons of countries and regions.

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    of 13

    Gross Domestic

    Product
    What is GDP?
    • Gross domestic product (GDP) is a
    monetary measure of the value of all final
    goods and services produced in a period
    (quarterly or yearly).
    • Nominal GDP estimates are commonly
    used to determine the economic
    performance of a whole country or region,
    and to make international comparisons.
    Components of GDP
    • • Consumption (C)
    • • Investment (I)
    • • Government Spending's (G)
    • • Net Exports (X – M)
    GDP: Two Methods

    Expenditure method (product market) – what is produced is also purchased

    Income method (resource market) – the total value is the sum of all the parts
    To Calculate GDP
    Consumptio
    n It is Household Final Consumption Expenditure
     It Includes
    • Durable Goods
    • Non-Durable Goods and
    • Services

    Eg: Food, House Holds, Medical Expenses, Rent, Jewellery,


    Gasoline, etc.
    Investment
     Investment by Business or Households in Capital.
     It Includes
    • Construction of New Mine.
    • Purchase of Machinery or Equipment for Factory.
    • Purchase of software.
    • Expenditure on New Houses.
    • Buying Goods and Services.

     Investments on Financial Products is not included in


    Investments.
    Government Spending's
     Total Government Expenditures on Final
    Goods and Services.
     It Includes
    • Investment Expenditure by Government.
    • Purchases of weapons for Military.
    • Salaries of Public Servants.
    It does not include any transfer
    payments, such as social security or
    unemployment benefits.
    Net Exports (X – M)
    Gross Exports (X)
    •All Goods and Services Produced for
    Overseas Consumption.

    Gross Imports(M)
    •Any Goods or Services Imported for
    Consumption.
    Three Variations on GDP

    Per Capita GDP

    Real GDP vs. nominal GDP

    GDP vs. GNP


    Per capita GDP = GDP ÷ population
    Average level of income in a nation
    Not income distribution

    Nominal GDP – current production at current


    prices
    Real GDP – current production at base
    year prices
    To convert, use the GDP deflator
    GDP Deflator = (Nominal GDP / Real GDP) *
    100

    GNP – total market value of all final goods


    and services produced in a year from factors of
    production (resources) owned by country’s
    residents
    GNP is produced with the resources owned by the
    country (anywhere in the world).
    GDP is produced inside the country’s borders.
    Business Planning

    Impact of GDP

    Business Planning

    Changes in Currency Values

    Government Policies

    Interest Rate Changes


    THANK
    YOU

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