- GDP- (GROSS DOMESTIC PRODUCT)-means ‘money value of everything produced in the country’
1 inside the country
2 both goods + services
- GNP (GROSS NATIONAL PRODUCT) – means GDP plus money value of things produced by Indians abroad minus money value of things produced by foreigners in India. it is equal to GDP + ANIL KAPOOR – GARY KIRSTEN
- METHODS OF CALCULATING GDP:-1 EXPENDITURE METHOD , 2 INCOME METHOD ,3 PRODUCTION METHOD
- EXPENDITURE METHOD-consumption by private citizens plus people’s investment in share market and banks plus all government spending plus money received from export minus money spent on imports.
Note :- second hand product money value is not added; agent money is added.
- INCOME METHOD- all income is added (difficult to account for credit and delays)
- PRODUCTION METHOD – total money value of everything produced (value added at each stage).wheat (2500)+flour(3500)+bread( 3500) not equal to 8000, but 2000+500+1000=3500
- GDP @market price = GDP @factor cost + indirect taxes-subsidies
- GDP @factor cost= GDP @ market price –indirect taxes +subsidies
SUBSIDY= Subsidy on Urea ; tax = tax on DVD’S etc.