{"id":23594,"date":"2015-02-25T08:11:59","date_gmt":"2015-02-25T08:11:59","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=23594"},"modified":"2024-04-03T13:15:24","modified_gmt":"2024-04-03T07:45:24","slug":"what-is-gdp","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/what-is-gdp\/","title":{"rendered":"What is Gross Domestic Product?"},"content":{"rendered":"<p align=\"center\"><span style=\"text-decoration: underline\"><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/what-is-gdp.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-25907\" src=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/what-is-gdp.jpg\" alt=\"what is gdp\" width=\"299\" height=\"168\" \/><\/a>\u00a0<\/span><\/p>\n<p>\u201cGross Domestic Product\u201d is nothing but the monetary value of all the officially recognized finished goods and services produced within a country in a year or a specific time period.<br \/>\nIt includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.<br \/>\n\u201cGross Domestic Product\u201d is not to be mistaken for \u201cGross National Income\u201d<\/p>\n<p>&nbsp;<\/p>\n<p>Gross Domestic Product can be bifurcated into Real GDP and Nominal GDP. The difference between Nominal GDP and Real GDP is used to measure inflation in a statistic called The GDP Deflator.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>India had anticipated a GDP growth of 5.7% in 2015, which clearly makes it a host destination investors and business seeking industrialist of the world. The medium of \u201cCommunication Technology\u201d has been used to develop a country\u2019s socio-economic situation. \u201cCommunication Technology\u201d has proved to be indeed a vital tools to smoothen to process to International Development and Human Rights awareness. Through this medium one seeks to understand the problems faced by the community, educational standards and basic infrastructure to support strategic occupations.<\/p>\n<p><b><span style=\"text-decoration: underline\">What does it indicate? <\/span><\/b><\/p>\n<ul>\n<li>GDP per capita is an indicator of a country&#8217;s material standard of living.<\/li>\n<li>Gross domestic product attempts to pinpoint the country\u2019s economic health\u00a0in just one number and when a country is health unemployment is low and wages increase.<\/li>\n<\/ul>\n<p><b><span style=\"text-decoration: underline\">What does it represent? <\/span><\/b><\/p>\n<ul>\n<li>Apart from representing the economic health of the country it also presents a sum of a country&#8217;s production which consists of all purchases of goods and services produced by a country and services used by individuals, firms, foreigners and the governing bodies.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><b><span style=\"text-decoration: underline\">GDP Calculation<\/span><\/b><\/p>\n<ul>\n<li>The GDP of a country can be calculated in the below mentioned rates\n<ul>\n<li>Expenditure approach,<\/li>\n<li>Income approach<\/li>\n<li>Value-added approach<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<table border=\"1\" width=\"669\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td valign=\"top\" width=\"60\">\n<p align=\"center\"><b><span style=\"text-decoration: underline\">Sr No<\/span><\/b><\/p>\n<\/td>\n<td valign=\"top\" width=\"315\">\n<p align=\"center\"><b><span style=\"text-decoration: underline\">Real GDP<\/span><\/b><\/p>\n<\/td>\n<td valign=\"top\" width=\"294\">\n<p align=\"center\"><b><span style=\"text-decoration: underline\">Nominal GDP<\/span><\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"60\">1.<\/td>\n<td valign=\"top\" width=\"315\">Real GDP is the total market value of goods and services produced, measured in constant dollars that is current quantities at past prices.<\/td>\n<td valign=\"top\" width=\"294\">Nominal GDP is the total market value of goods and services produced, measured in current dollars that is current quantities at current prices.<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"60\">2.<\/td>\n<td valign=\"top\" width=\"315\">Real GDP is used to compare GDP in one year with past years in order to study trends in Economic Growth<\/td>\n<td valign=\"top\" width=\"294\">Nominal GDP is used to determine the total value of the products and services manufactured in a country during a particular year<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"60\">3.<\/td>\n<td valign=\"top\" width=\"315\">Real GDP helps you to compare countries<\/td>\n<td valign=\"top\" width=\"294\">Nominal GDP helps us to know absolute output of any country<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"60\">4.<\/td>\n<td valign=\"top\" width=\"315\">Real GDP measures the value of all the goods and services produced expressed in the prices of some base year<\/td>\n<td valign=\"top\" width=\"294\">The Nominal GDP measures the value of all the goods and services produced expressed in current prices.<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"60\">5.<\/td>\n<td valign=\"top\" width=\"315\">Real GDP values are adjusted for inflation thus they appear lower than Nominal GDP values<\/td>\n<td valign=\"top\" width=\"294\">Nominal GDP values are not adjusted thus they appear higher than Real GDP values<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"60\">6.<\/td>\n<td valign=\"top\" width=\"315\">Real GDP is a measure of the value of output economy, adjusted for price changes<\/td>\n<td valign=\"top\" width=\"294\">Nominal GDP is the measure of\u00a0 market value of all final goods and services produced in a country<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><b><span style=\"text-decoration: underline\">Importance of GDP<\/span><\/b><\/p>\n<ul>\n<li>Gross Domestic Production carries a lot of significance as it gives an overall picture of the economic state of the nation<\/li>\n<li>GDP enables policymakers and central banks to judge:\n<ul>\n<li>The economy contraction\/expansion<\/li>\n<li>Need of a boost\/restraint<\/li>\n<li>Threat of recession\/ inflation<\/li>\n<li>\u201cGross Domestic Product\u201d helps policymakers, economists and businessmen to analyze the monetary and fiscal policy, economic shocks, tax and spending plans\n<ul>\n<li>Investors look at the GDP growth rate to see if the economy is changing rapidly so they can adjust their asset allocation. In addition, investors compare country GDP growth rates to decide where the best opportunities are.<\/li>\n<li>GDP report helps us to understand which sectors of the economy are growing and which are declining.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b><span style=\"text-decoration: underline\">India\u2019s GDP trend <\/span><\/b><\/p>\n<ul>\n<li>GDP at factor cost at current prices in the year 2013-14 is estimated at `104.73 lakh crore, showing a growth rate of 11.5 percent over the First Revised Estimates of GDP for the year 2012-13 of ` 93.89 lakh crore, released on 31th January 2014.<\/li>\n<li>India\u2019s GDP when calculated in 2012 came to 1.842 trillion USD<\/li>\n<\/ul>\n<table border=\"1\" width=\"648\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td valign=\"top\" width=\"403\">\n<p align=\"center\"><b>Item<\/b><\/p>\n<\/td>\n<td valign=\"top\" width=\"114\">\n<p align=\"center\"><b>2012-13<\/b><\/p>\n<\/td>\n<td valign=\"top\" width=\"131\">\n<p align=\"center\"><b>2013-14<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"403\">Gross Domestic Product- Factor Cost<\/td>\n<td valign=\"top\" width=\"114\">\n<p align=\"center\">5482111<\/p>\n<p align=\"center\">(4.5)<\/p>\n<\/td>\n<td valign=\"top\" width=\"131\">\n<p align=\"center\">5741791<\/p>\n<p align=\"center\">(4.7)<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"403\">Gross Domestic Product- Market Prices<\/td>\n<td valign=\"top\" width=\"114\">\n<p align=\"center\">5899847<\/p>\n<p align=\"center\">(4.7)<\/p>\n<\/td>\n<td valign=\"top\" width=\"131\">\n<p align=\"center\">6195842<\/p>\n<p align=\"center\">(5.0)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/accounting-banking-and-finance\">Click here for government certification in Accounting, Banking &amp; Finance<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0 \u201cGross Domestic Product\u201d is nothing but the monetary value of all the officially recognized finished goods and services produced within a country in a year or a specific time period. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory. \u201cGross Domestic Product\u201d&#8230;<\/p>\n","protected":false},"author":602,"featured_media":25907,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[2138,2343,2342,2344],"class_list":["post-23594","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-gdp","tag-monetary-value","tag-nation","tag-production"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is Gross Domestic Product? - Vskills Blog<\/title>\n<meta name=\"description\" content=\"Learn What does the term GDP or Gross Domestic Product refers to and what is it&#039;s importance in economics and finance? 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