Here the full form of GDP will be discussed. Over a given period of time (eg, a quarter or a year), GDP measures the money value of goods and services produced in a country. It is the result of all economic activities within the boundaries of the nation. Along with the goods and services produced to be sold in the market, GDP includes certain non-market activities that governments perform, such as defense and educational services provided by the government.
full form of GDP
gross domestic product The full form of GDP is . Gross Domestic Product (GDP) is the total monetary value of all goods and services produced within a country’s borders over a period of time. A comprehensive scorecard of a given country’s economic health is based on it as a specific measure of overall domestic output. Gross domestic product (GDP) is what economists refer to in terms of the size of the economy.
An essential indicator of the economic development of a country is the GDP growth rate. The GDP of a country increases due to the increase in the standard of living of the people of that country. The ideal country to live in has a high GDP in terms of economic development. Agriculture, manufacturing and service sectors are the three most important sectors that contribute significantly to the GDP of India.
History of GDP
GDP History – Between 1652 and 1674 the British and Dutch taxed landlords unfairly and Petty developed this concept to protect them. He was later followed by Charles Davenant. Simon Kuznets developed a modern version of this concept in 1934. As a result of the Bretton Woods Conference in 1944, it became the primary way to measure its economy.
Where do GDP figures come from?
Eight of the industries included in the calculation of GDP at factor cost are: agriculture, mining and quarrying, manufacturing, forestry and fishing, electricity and gas supply, construction, trade, hotels, transportation and communications, financial services and insurance, and Community, social and public services. Using expenditures, the calculation of GDP relies on net export expenditures on all consumer, government, business investments and final goods and services.
The government releases GDP figures every two months and the final figures of the year are released on 31 May.
What is the full form of GDP?
By measuring GDP, economists can tell whether an economy is healthy and growing and whether inflation or deflation affects it.
- The expansion of the economy in successive quarters is a sign of a growing economy. As long as economic growth continues, economists may note rising inflation risks, and policymakers may consider raising interest rates to combat inflation.
- GDP growth is considered to be bearish if it is harmful for at least two consecutive quarters. It is clear from this that there is a need to lower interest rates or inject more money into the system to maintain economic stability.
Data on GDP can also be used to compare countries or economic sectors. According to estimates, China will overtake the US as the world’s largest economy by 2020. It has historically been the highest GDP globally, having been interrupted only briefly by the British Empire, the United States and the European Union over the past two centuries.
In what ways is GDP used in calculation deficiencies?
GDP is not without its problems.
- GDP as a whole cannot determine the standard of living. Despite its large GDP, China has a relatively low standard of living, and is classified as a “middle-income” country. While the United States has one of the highest standards of living globally, its consumers spend much more. GDP per capita is calculated by dividing GDP by the total population of a country.
- Black market economy is not included in GDP. Some countries rely on their tax revenues to estimate their budgets, such as the United States. Various illegal goods and services are sold and bought in black markets but they are not reported. Illegal drugs, prostitution and labor are some of the illegal goods and services.
- In addition, unreported labor is not included in the GDP. For example, unreported labor includes child care and household maintenance. So, for example, men and women who choose to stay at home to care for their children while working full-time are excluded from national economic data or labor data.
- Ecological costs are not accounted for in GDP. An example would be the production and sale of single-use plastic cups, but its disposal costs and environmental damage are not included in GDP.
GDP is an essential indicator of the health of an economy. While measuring the economic condition of a country, GDP does not consider the well being of its citizens, their health or their happiness. Thus economics is a complex but essential subject.