hii guysss in ann... im new here in brainly... i wld lovee to make new frnds.. what is GDP??
Answers
Gross Domestic Product ( GDP )
It is the monetary value of all finished goods and services within a country in a particular period.
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Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.
Though GDP is typically calculated on an annual basis, it is sometimes calculated on a quarterly basis as well. In the U.S., for example, the government releases an annualized GDP estimate for each fiscal quarter and also for the calendar year. The individual data sets included in this report are given in real terms, so the data is adjusted for price changes and is, therefore, net of inflation. In the U.S., the Bureau of Economic Analysis (BEA) calculates the GDP using data ascertained through surveys of retailers, manufacturers, and builders, and by looking at trade flows.
KEY TAKEAWAYS
Gross Domestic Product (GDP) is the monetary value of all finished goods and services made within a country during a specific period.
GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate.
GDP can be calculated in three ways, using expenditures, production, or incomes. It can be adjusted for inflation and population to provide deeper insights.
Though it has limitations, GDP is a key tool to guide policymakers, investors, and businesses in strategic decision making.
Understanding Gross Domestic Product (GDP)
The calculation of a country's GDP encompasses all private and public consumption, government outlays, investments, additions to private inventories, paid-in construction costs, and the foreign balance of trade. (Exports are added to the value and imports are subtracted).
Of all the components that make up a country's GDP, the foreign balance of trade is especially important. The GDP of a country tends to increase when the total value of goods and services that domestic producers sell to foreign countries exceeds the total value of foreign goods and services that domestic consumers buy. When this situation occurs, a country is said to have a trade surplus. If the opposite situation occurs–if the amount that domestic consumers spend on foreign products is greater than the total sum of what domestic producers are able to sell to foreign consumers–it is called a trade deficit. In this situation, the GDP of a country tends to decrease.
In addition, there are several popular variations of GDP measurements which can be useful for different purposes:
Nominal GDP: GDP evaluated at current market prices, in either the local currency or in U.S. dollars at currency market exchanges rates in order to compare countries' GDP in purely financial terms.
GDP, Purchasing Power Parity (PPP): GDP measured in "international dollars" using the method of Purchasing Power Parity (PPP), which adjusts for differences in local prices and costs of living in order to make cross-country comparisons of real output, real income, and living standards.
Real GDP: Real GDP is an inflation-adjusted measure that reflects the quantity of goods and services produced by an economy in a given year, with prices held constant from year to year in order to separate out the impact of inflation or deflation from the trend in output over time.
GDP Growth Rate: The GDP growth rate compares one year (or quarter) of a country's GDP to the previous year (or quarter) in order to measure how fast an economy is growing. Usually expressed as a percent rate, this measure is popular for economic policy makers because GDP growth is though to be closely connected to key policy targets such as inflation and unemployment rates.
GDP Per Capita: GDP per capita is a measurement of the GDP per person in a country's population. It indicates the the amount of output or income per person in an economy can indicate average productivity or average living standards. GDP per capita can be stated in nominal, real (inflation adjusted), or PPP terms.
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