Question

Explain term gdp and why are only final goods and services count in gdp

Answer 1

Only final goods and services arecounted, to avoid multiple counting, since their prices covers the cost of all intermediate products and servicesthat were used to produce the finaloutput. Another way to calculate GDPis to measure the value added to eachproduct or service at each stage of its production.

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