what is GDP? How to calculate it
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GDP of a country provides a measure of the monetary value of the goods and services it produces in a specific year. Full form of GDP is Gross Domestic Product.One way of arriving at the GDP of a country is to calculate the monies spent by the different groups that participate in the economy. For instance, consumers spend money to buy various goods and services and businesses spend money as they invest in their business activities, by buying machinery, for instance. And governments also spend money. All these activities contribute to the GDP of a country.
In addition, some of the goods and services that an economy makes are exported overseas. And some of the products and services that are consumed within the country are imports from overseas. The GDP calculation also accounts for spending on exports and imports. Thus, a country’s GDP is a measure of consumer spending (C) plus business investment (I) and government spending (G) as well as its net exports, which is exports minus imports (X-M).
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GDP is the value of total final goods produced each year.it is calculated by a special branch of govt.
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