What is the full form of GDP ?

The correct answer is Gross Domestic Product.

Key Points

• Gross Domestic Product (GDP) refers to the total monetary value of all finished goods and services produced within a country's borders in a specific time period.
• It is a crucial indicator used to gauge the economic health and size of a country’s economy.
• GDP is calculated based on three main approaches: the production approach, the income approach, and the expenditure approach.
• GDP can be expressed in nominal terms (current prices) or real terms (adjusted for inflation).
• It serves as a key metric for policymakers, economists, and investors to analyze economic performance and make informed decisions.

Additional Information

• Types of GDP:
  • Nominal GDP: Measures the monetary value of goods and services at current market prices without adjusting for inflation.
  • Real GDP: Adjusts for inflation to reflect the true economic growth by valuing goods and services at constant prices.
  • GDP Per Capita: Represents GDP divided by the population, indicating the average economic output per person.
• GDP Calculation Approaches:
  • Production Approach: Calculates GDP based on the value of output produced by industries minus the value of intermediate goods.
  • Income Approach: Sums up all incomes earned (wages, profits, rents) within an economy.
  • Expenditure Approach: Measures GDP based on total spending on goods and services (consumption, investment, government spending, net exports).
• GDP Limitations:
  • Does not account for informal or unreported economic activities.
  • Fails to measure income inequality or environmental sustainability.
  • Does not reflect the overall well-being or quality of life of citizens.
• Global Context:
  • Countries like the United States, China, and India are among the largest contributors to global GDP.
  • GDP growth rates are often used to compare economic performance between nations.