INTRODUCTION TO GDP
ARQUT ME ' Graduation in Computer Engineering from Panjab University, Chandigarh Post-graduation in Business Administration from Panjab University, Chandigarh : Cleared UPSC Preliminary Examination thrice. : Appeared for UPSC interview. . Working at Career Launcher. *Follow me at http://unacademy.in/user/goyalsamridhi02
What is GDP? GDP is the total market value of a country's output. It is the market value of all final goods and services: "Produced within a financial year. " by factors of production. "located within a country " irrespective of ownership.
What is GNP? It is termed as a measure of economic growth. GNP can be defined as: " Total market value of all final goods and services " Produced within a financial year, " By factors of production " owned by a country's citizens " regardless of where the output is being produced.
GDP v/s GNP It is important to compare the definitions of GDP and GNP and understand the difference between the two. GDP is all the final goods produced within _a domestic territory irrespective of the person producing GNP is the final goods produced by_citizens of a country irrespective of where they are produced in the world.
NATIONAL v/s DOMESTIC National income and related aggregates are measures of production activity. There are two categories of national income aggregates: Domestic and national, or " Domestic product and national product.
NATIONAL v/s DOMESTIC Production activity of the production units located within the economic territory is domestic product irrespective of whether carried out by the residents or non-residents i.e irrespective of whether performed by citizen of India or not. Whereas National Product includes production activities of residents irrespective of whether performed within the economic territory or outside it. (example: workers working in Gulf countries)
FORMULA Therefore: National Product Domestic Product+ Factor income received from abroad- Factor income income paid to abroad. GNP GDPNFIA NFIA Factor income received abroad by Indian normal residents- Factor income paid to foreign residents in Indian domestic territory.