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Friends if you read the newspaper or watch the news, then you often get to see and hear the name GDP then the idea comes to your mind after all what is GDP and what is GDP Full Form. Today I will make you aware of all the meaning of GDP so stay till the end of the article.
What Is GDP | GDP Full Form?
GDP Full Form
The full form of GDP is the “Gross Domestic Product”.
GDP Full Form In Hindi
The Full Form of GDP in Hindi is “सकल घरेलु उत्पाद”.
Other Full Form Of GDP
General Defense Position
Go Down Path
Great Depression Problem
Gross Domestic Purchases
What Is GDP?
American economist Simon Kul Jain first used the term GDP. He used the term GDP to know the income of America’s domestic product between 1935 and 1944. after some time this term was used by IMF (International Mudra Fund). Other countries also started using the term GDP.
Within India’s border, many goods are produced such as Fridge, Mobile, Flour, Cement as well as whatever services are provided within India in 1 year such as a doctor’s service, lawyer service, and teacher service, then the sum of the prices of all these finished products and services is called GDP.
Note:- Here Finished Products are those Products that have been sold in the market.
What Is The Meaning Of The GDP?
This is considered a very accurate way to measure the economic condition of any country.
In the calculation of GDP, it does not matter whether the services and products are being done by Indians or are being done by foreigners, all this should be within the border of India.
What Are The Components Of GDP?
There are three major components of GDP.
Primary Component: Under this, the value of the product associated with the agricultural sector is calculated.
Secondary Component: Under this, the product’s value associated with the industry sector is determined.
Tertiary component: Under this, the value of the product associated with the service sector is determined.
By adding the prices of all three components, whatever figure is obtained is called GDP but the inflation rate keeps on increasing, and hence the prices of products and services also change. Therefore you need to know how GDP is calculated.
How To Do Calculation Of GDP?
GDP is calculated in two ways, Nominal GDP and Real GDP.
Talking about Nominal GDP, There is a very simple calculation inside it. The sum of the total prices of the finished products and services is called Nominal GDP.
Whatever data the government gives us, it gives us the figure of nominal GDP but the inflation rate is not included in the calculation of nominal GDP.
Let us understand this with an example. Supposed you have ₹ 100 in your pocket and the inflation rate is 8%, then after 1 year your ₹ 100 is considered as ₹ 92 because the inflation rate is 8% i.e. Now your Purchasing Power will decrease.
In Real GDP, Inflation is also included. The true condition of any country is known by its Real GDP.
What is the GDP formula?
A formula was created to measure GDP using which you can easily find out the economic development of any country.
GDP = C + I + G + (X – M)
C: Consumption means that the personal household expenses of the people of the country like food, rent, medical expenses, and such household expenses are included in it but the new house is not included in this.
I: Investment i.e. The total expenditure made by all the institutions on goods and services within the domestic borders of the country is called total investment.
G: Government Spending This includes all types of expenditures made by the government, such as investments made by the government, salaries of all types of government employees, investment in the country’s security schemes, etc.
X: Export refers to such products and services that prepare goods and services for the consumption of another country, which is included in GDP.
M: Import means such goods and services which have not been produced within our country’s border and we deduct the imports while calculating GDP.
What is GDP Growth?
Let us understand this with an example, suppose that a country that produced products worth ₹100000 and services of ₹100000 in 1 year, then its GDP became ₹200000.
In the next year, the same country produced products worth ₹90000 and services were generated of ₹120000, then the GDP became ₹210000
Easily you can see that there was a growth of ₹10000 in GDP or 5%.
See, the government does not have the details of the product and service, they only have the details of the tax. Accordingly, GDP growth is calculated. GDP Growth can also be calculated Quarterly and Yearly.
GDP Full Form YouTube Video Guide
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