GDP-Gross Domestic Product 

TANMOY MUKHERJI INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherji

Advocate

GDP-

Tanmoy Mukherji

Advocate

Gross Domestic Product (GDP) is the total market value of all final goods on services produced within the domestic territory of a country during a given period usually one financial year.

It includes production by residents and non-residents, as long as the production takes place within the country.

Components of GDP-

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

Where-

→C = Private consumption expenditure

→I = Gross Investment

→G = Government Expenditure

→X = Exports

→M = Imports

Methods of measuring GDP-

1) Product method (value added)-

GDP = Sum of value added by all productive units in the economy.

2) Income method-

GDP = wages + Rent + Interest + Profit + Mixed income + Depreciation + Net indirect taxes.

3) Expenditure-

GDP = Total Final Expenditure on goods and Services.

Types-

Importance-

Limitations of GDP-

GDP is the most widely used indicator of a country's economic performance, but it should be used along with other indicators for a complete picture of economic welfare.