GDP Full form – What Does GDP Stand for
GDP Full Form is “Gross Domestic Product”.
GDP is an abbreviation for Gross Domestic Product. It is the total market value of all products and services manufactured within a nation during a given period of time. GDP is a government measurement that is used to evaluate the scale of an economy as well as the total development or decrease of a country’s economy.
How to calculate GDP (Gross Domestic Product)?
The CSO (central statistical office) is in charge of collecting data for GDP calculations. The GDP calculation process starts after the data collection process is finished. The GDP figure can be calculated in two ways:
Method 1: GDP at Factor Cost
GDP at factor cost is the amount of net value added in different economic activities. This approach examines economic development.
Method 2: The Expenditure-based Method
The expenditure method is the most commonly used method for measuring GDP, and it is a calculation of the economy’s income achieved within a country’s boundaries, regardless of who possesses the means of production. GDP is measured using this formula by including all spending on final goods and services.
The formula of calculating GDP is mentioned below:
GDP = private consumption + gross investment + government investment + government spending + net export.
Key Points of calculating GDP:
- To compute the GDP the national income accounts use market prices.
- The cost of used goods is not included in the measure.
- GDP only took into account the valuation of finished products.
What is the GDP per Capita?
The Gross Domestic Product (GDP) per capita is a measurement that calculates a country’s economic production per person.
Gross Domestic Product (GDP) per capita is calculated by dividing a country’s GDP by the total population.
What are the Nominal GDP and Real GDP?
The nominal GDP is the monetary value of all goods and services produced in a country and it is measured using current market prices.
Real gross domestic product (GDP) is an inflation-adjusted indicator that measures the valuation of all goods and services generated by an economy over a given time period. It is also known as constant-price GDP.
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