Question

define GDP and it's characteristics​

Answer 1

Answer:

GDP : GROSS DOMESTIC PRODUCT

Gross Domestic Product (GDP) refers to the value of all the goods and service sold in the economy within a set time period. Two consecutive quarters of negative GDP growth are classified as an economic recession. There are four main components to GDP – Consumption, Investment, Government spending, and Net exports.

CHARACTERISTICS OF GDP :-

• Interest Rates

The Fed implements expansionary monetary policy to ward off recession and contractionary monetary policy to prevent inflation. Its primary tool is the federal funds rate. For example, if the growth rate is increasing, then the Fed raises interest rates to stem inflation. The federal funds rate affects any interest rate you encounter in your life, from mortgages to personal loans to yields on your savings account. In this example, the Fed is raising rates, so you should lock in a fixed-rate mortgage. Your payments on an adjustable-rate mortgage would rise along with the fed funds rate.

• Unemployment

If growth slows or becomes negative, then you should update your resume because low economic growth leads to layoffs and unemployment. It may take a few months to see the corresponding job loss because it takes time for executives to compile the layoff list and prepare exit packages, but when economic growth slows, it's inevitable for many companies. This delay between economic growth rates and the impact on individual workers makes unemployment a lagging indicator.

• Finding Opportunities During Downturns

The BEA offers breakdowns of GDP data that examine specific sectors and products. You can use these details to determine which sectors of the economy are growing and which are declining. Even during hard economic times, particular sectors continue to add jobs, such as the health care industry during the 2008 financial crisis.

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Answer 2

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GDP stands for Gross Domestic Product.

It is the sum total of all final goods and services produced in a country during a particular year. It shows how big the economy is.

It is the sum of production in all sectors.in india this mammoth task is undertaken by central govt. ministry.

It collects information with the help of various govt. departments of all states and union territories.

GDP = C + I + G + (X – M)

where

• C = private consumption
• I = gross investment
• G = government investment + government spending
• X = exports
• M = imports