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  • Category: Miscellaneous

    Can anyone explain what is GDP and its calculations in a layman language?

    When Congress was asked as to how they would get fund for NYAY, to distribute Rs. 72000/- per year, to the 5 crore poorest of the poor, the Congress economists explain that the GDP rate has improved and what is required to be spent for NYAY is only a small percentage of it.

    Now let us know what is GDP and how it is calculated. Also how the government can help the poor through this GDP. I want our knowledgeable members to explain it in a layman's language with suitable examples.
  • #662159
    Gross Domestic Product (GDP) is a number that will express the worth of the outputs of a country in local currency. GDP will include all final goods and services that are produced in the country. This will ensure that the final monetary value of all the products manufactured in a country is represented in the GDP. GDP will be calculated once in three months for the three months period in our country.
    The GDP can be calculated using the following formula.
    A = B + C + D + NX
    A represents GDP.
    B is the total expenditure for houses on durable goods, nondurable goods and services.I, is the sum of
    C is the expenditure on capital equipment, inventories and structures.
    D is the sum of expenditures by all government bodies on goods and services.
    NX is the difference between spending on domestic goods by foreigners and spending on foreign goods by domestic residents.
    There are other methods also to calculate the GDP. The method explained by me is one of them.

    drrao
    always confident

  • #662174
    GDP (Gross Domestic Product) is generally defined as the sum of various entities corresponding to the market value of all final goods and services produced within a country in a given period of time.

    Gross means all the products wherever to be used. Domestic means within the country boundaries.

    The general equation used to calculate the GDP is as follows -

    GDP=C+I+G+(X-M)

    Where -
    C is the private consumption.
    I is the gross investment.
    G is the Govt investment and Govt spending.
    X is export.
    M is import.

    Thoughts exchanged is knowledge gained.


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