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What is GDP | How GDP is Calculated

What is GDP? How GDP calculated? What is GNP? What are NNPs?. You will find great information about such essential points in this post. Surely read this post.

Indian Economy is the world’s third-largest economy. Regarding area, it is ranked 7th in the world; it is second place in the population. Since 1991 rapid economic progress has taken place in India since the policy of liberalization and financial reform has been implemented, and India has emerged as an economic powerhouse of the world. Indian economy is getting better and stronger day by day.

What is GDP | GDP Full Form

What is GDP

GDP – Gross Domestic Product or

GDI – Gross Domestic Income

GDP Definition – The total market or monetary value of all the final goods and services produced in any given time, usually one year, within a country’s border, the GDP of that country – GDP (Gross Domestic Product – GDP) Goes.

To calculate GDP, we use this equation; its detailed information is given below.

GDP = Consumption + Gross Investment + Government spending + (Export – Import)

What is GNP| GNP Full Form

GNP = Gross National Product (GNP – Gross National Product)

It is also used in national income accounting if the income reduced from the gross domestic product, which has been created only in the country, but foreigners are receivable, and the country will receive, but the earnings earned abroad are added Given if gross National Product (GNP) collected.

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You can understand GNP more easily by example.

A foreign singer sings a song in India and singing that song which will receive the income (money) and take it to his country, it will be reduced from GDP and if any Indian singer sings abroad and the revenue that will be received from them and bring your country will be added to GDP. Thus, gross national product calculated.

GNP can be represented by the following equation.
GNP = GDP + X-M
here
X = earnings earned abroad by countrymen
M = Earned earnings by foreigners in the country

What is NNP | NNP Full Form

NNP – Net National Product

After deducting the amount of depreciation from the gross national product, the net domestic product known.

How GDP calculated

How GDP Calculated

GDP can be calculated in 3 ways.

  1. Expenditure method of counting GDP
  2. Income method of computing GDP
  3. The production method of calculating GDP

1.Expenditure method of counting GDP

The easiest and common way to calculate GDP is the expenditure method.

GDP = Consumption + Gross Investment + Government spending + (Export – Import)
Or
GDP = C + I + G + (X – M)

C (Consumption) – This includes most household expenses like food, rent, medical expenses. The following equation can represent GNP and other such expenses, but the new house is not included in it.

I (Investment) – is defined as investment by business or home as a capital. If money converted into goods or services, it is an investment.

G (Government expenditure) – Includes salaries of government employees, purchase of weapons for the army and investment expenditure by the government.

X (Export) – Export added to GDP under which the other countries counted as goods or services prepared for consumption.

M (import) – Imports are reduced. It involves imported goods and services.

X (Export) – Export added to GDP under which the other countries counted as goods or services prepared for consumption.

M (import) – Imports are reduced. It involves imported goods and services.

2.Income method of counting GDP

Under the Income Tax Act, you will calculate the income of all, but there will be some people who are running their business from lending, or someone is getting late payment, so this method is not sustainable.

By income, we can calculate GDP (gross domestic product), factor income added to the factors of production in society.

These include-

Employee Compensation + Corporate Profit + Owner’s Income + Rental Income + Net Interest

3.The production method of counting GDP

The value of the sale of goods – the purchase of intermediate products for the production of the goods sold.

  • The farmer produces wheat and sells 10 kg in 200 rupees.
  • Aha’s line bought him, pissed it and sold a bakery to 250 rupees. (50 rupees connected in previous purchase)
  • The bakery made his bread, made a biscuit and sold it to 350 rupees (100 rupees in last procurement)

So what is the total GDP
350 – 250 = 100
250 – 200 = 50

200 – 0 = 200

Total – 350 (total GDP)

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About author

Hello Guys, My name is Sandeep Gautam. I am the founder of Indiatechmoney. I have done my masters from IIT Roorkee. My interest is in Business, technology, and blogging. I want to give the best information about the business, technology and blogging through this blog.
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