gdp ...

gdp acronym stands for gdp- gross domestic product Definition for gdp -there are three ways to define gdp -each definition is conceptually indentical definitons for gdp 1. gdp is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time (usually a 365-day year) 2. gdp is equal to the sum of the value added at every stage of production (the intermediate stages ) by all hte industries within .country ,plus taxes les s subsidies on products,in the period. 3. gdp is equal to the sum of the income generated by production in the country in the period -that is ,compensation of employees, and immports less subsidies ,gross operating surplus(or profits). commonly used for measuring only the expenditure method is used for measuring an d quantifying gdp . formula: gdp=C+I+G+(X-M) or gdp =consummption +gross investment +govt. spending+(exports-imports) some important points 1. "gross" means that depreciation of capital stock is not subtracted out of net i nvestment (which is gross investment minus depreciation)is substituted for gross investment in the equation above, thn the formula for net domestic product is obtained. 2. consumption and invetsment in this equation are expenditure on final goods an d services. 3. the exports -minus-imports part of the equation (often called net exports)adj usts this by subtracting the part of this expenditure not produced domestically (the imports) ,and adding back in domestic area (the exports)

diagramatic representation consimption + gross investment + government spending +(exports-imports)

- gdp

gdp=C+i +P+G(M-X) where: c consumption i investment G government spending m imports

gdp=C+i +P+G(M-X) c consumption includes :: _personal expenditures mainly consists of : .food >households >medical expenses >rent,etc.

_ for ex ,if a hotle is a private home then renovation spending would be measur ed as consumption.

i investment by households or business in capital . ex,if you spend money to renovate your hotel so that occupany rates increase,tha is private investment

-includes >construction of a new time .purchase of machinery or a equipment for factory >purchase of software >expenditure on new houses . buying goods and services.

-notes :: investments on financial products is not included in investments.

g total govt. expenditures on final goods and services. _ services > investment expenditure by the govt. .purchase of weapons for the military

>salaries of public servants.

ex: if a govt. agency is converting the hotel into an office for civil servants the renovation spending would be measured as part of public sector spending (G) X ;; gross exports inclludes :: > all goods and services produced for overseas consumption ex<if a domestic producer is paid to make the chandelier for a foreign hotel , t he payment wooould be counted in gross export

m ; gross import

_ includes :: > any goods or services imported for consumption

ex: if the renovavtion of hotel involves the purchase of a chandelier from abroad , that spending would be counted in gross imports.

india economy -facts on india GDP

the indian economy is the 11th largest in the world. ranks 5th pertaining to purchasing power parity (PPP) acc. to world bank the gdp of india in the year 2007 was US $1.09 trillion

india is the one of the most rapidly growing economies in the world the growth rate of the india GDP was 9.4% per year. per capita income in india is $964 at nominal and $4,182 at PPP

india currently has the 11th largest gdp in the world.

.accounting for 1.6%of the global GDP in 2002.

.and ranks 26th in the world by total trade in goods and services (US$Billion, 2 002) india has been one of the fastest growing economies in the world over the last 2 0 years. annual average growth rates of 10 fastest growing economies over 1980-2002 excl. small countries (pop<10million)

projecting GDP using historical growth rates India would be the 6th largest econ omy in 2050.

using historical growth rates ,india would be the 10th largest trader in 2050.

STRENGTHS OF Gdp -broadest indicator of economic output and growth

-takes inflation into account ,allowing for coparisions againsts other historica l time periods

limitations of gdp to judge the health of an economy

-underground economy > official Gdp does not take any account the underground economy > that is transactions contributing to production ,such as illegal trade and tax -avoiding activites,are unprotected,causing GDP to be under estimated.

-sustainability of growth >GDP doe snot measure the sustainability for growth. _quality of goods >people may buy cheap,low -durability goods cver and over again , or they may bu y high_durability goods less often. >it is possible that the monetary value of the items sold in the simply the resu lt of greater inefficiency and waste.

_non-market transactions >GDP excludes activities that are not provided through the market ,such as household produuction and volunteer or unpaid services. > as a result ,GDP is understated .unpaid work conducted on free and open source softwarre (such as linux) contribute nothin to GDP ,but it is estimated that it would have cost more than a billion US dollars for a commercial company to devloop .

alternatives to /gdp .. -human development index(hdi ) >calculations uses;GDP , indicators of life expectancy and education levels.

_happy planet >it is anndex >measures the ithin a given

index of human well-being and environmental impact . environmental efficiency with which human well-being is acheived w country or group .

-wealth estimates

-prvate product remaining.

-european ouality of life survey . -gross naitonal happiness.