Definition:-The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.
Gross Domestic Product or GDP represents the economic health of a country. It presents a sum of a country's production which consists of all purchases of goods and services produced by a country and services used by individuals, firms, foreigners and the governing bodies.
Following is a simple way to calculate the GDP.
GDP = consumption + investment + government spending) + (exports-imports)
and the formula is GDP = C + I + G + (X-M) where
C= spending by consumers,
I= investment by businesses,
G= government spending and
(X-M)= net exports, that is, the value of exports minus imports. Net exports may be negative i.e. imports are more than exports.
Gross National Product (GNP)
It is important to differentiate Gross Domestic Product from Gross National Product (GNP). GDP includes only goods and services produced within the geographic boundaries of the U.S., regardless of the producer's nationality. GNP doesn't include goods and services produced by foreign producers, but does include goods and services produced by U.S. firms operating in foreign countries.
Gross Domestic Product or GDP represents the economic health of a country. It presents a sum of a country's production which consists of all purchases of goods and services produced by a country and services used by individuals, firms, foreigners and the governing bodies.
Following is a simple way to calculate the GDP.
GDP = consumption + investment + government spending) + (exports-imports)
and the formula is GDP = C + I + G + (X-M) where
C= spending by consumers,
I= investment by businesses,
G= government spending and
(X-M)= net exports, that is, the value of exports minus imports. Net exports may be negative i.e. imports are more than exports.
Gross National Product (GNP)
It is important to differentiate Gross Domestic Product from Gross National Product (GNP). GDP includes only goods and services produced within the geographic boundaries of the U.S., regardless of the producer's nationality. GNP doesn't include goods and services produced by foreign producers, but does include goods and services produced by U.S. firms operating in foreign countries.
Thankyou for the above information. It was very helpful .
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