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There

are
define GDP.

three

ways

Each
definition
conceptually identical.

to

is

DEFINITIONS FOR GDP


I.

II.

III.

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).
GDP is equal to the sum of the value
added at every stage of production (the
intermediate stages) by all the industries
within a country, plus taxes less subsidies
on products, in the period.
GDP is equal to the sum of the income
generated by production in the country in
the periodthat is, compensation of
employees, taxes on production and
imports
less
subsidies,
and
gross
operating surplus (or profits)

DEFINITIONS FOR GDP


I.

II.

III.

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).
GDP is equal to the sum of the value
added at every stage of production (the
intermediate stages) by all the industries
within a country, plus taxes less
subsidies on products, in the period.
GDP is equal to the sum of the income
generated by production in the country in
the periodthat is, compensation of
employees, taxes on production and
imports less subsidies, and gross operating
surplus (or profits)
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DEFINITIONS FOR GDP


I.

II.

III.

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).
GDP is equal to the sum of the value added
at every stage of production (the
intermediate stages) by all the industries
within a country, plus taxes less subsidies
on products, in the period.
GDP is equal to the sum of the income
generated by production in the country in
the periodthat is, compensation of
employees, taxes on production and
imports less subsidies, and gross
operating surplus (or profits)

GDP = C + I + G+(X-M)
OR
GDP = consumption + gross investment
+ government spending
+ (exports imports)
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Gross" means that depreciation of capital stock


is not subtracted out of GDP. If net investment
(which is gross investment minus depreciation)
is substituted for gross investment in the
equation above, then the formula for NET
DOMESTIC PRODUCT is obtained.
Consumption and investment in this equation
are expenditure on final goods and services.
The exports-minus-imports part of the equation
(often called net exports) adjusts this by
subtracting the part of this expenditure not
produced domestically (the imports), and adding
back in domestic area (the exports).

GDP = C + I + G+(X-M)
Where :
C : Consumption
I : Investment
G : Government spending
X : Exports
M : Imports
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: consumption

Includes

::

Personal expenditures mainly consists of:


food
households
medical expenses
rent, etc.
For

example, if a hotel is a private


home then renovation spending would
be measured as Consumption.
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I : investments by business or households in


capital.

Example, If you spend money to renovate your


hotel so that occupancy rates increase, that is
private investment.

Includes:
Construction of a new mine.
Purchase of machinery or equipment for factory.
Purchase of software.
Expenditure on new houses. Buying goods and services.

NOTE:: Investments on financial products is not


included in Investments.

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G : Total government expenditures on


final goods and services.

Includes ::
Investment expenditure by the government.
Purchase of weapons for the military
Salaries of public servants.

Example: if a government agency is


converting the hotel into an office for
civil servants the renovation spending
would be measured as part of public
sector spending (G).
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X : Gross Exports.

Includes ::
all goods and services produced for overseas
consumption.

Example, If a domestic producer is paid to


make the chandelier for a foreign hotel, the
payment would be counted in gross export.

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M : gross imports.

Includes ::
any goods or services imported for consumption

Example, If the renovation of hotel involves


the purchase of a chandelier from abroad,
that spending would be counted in gross
imports.
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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
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Broadest

indicator ofeconomic output and

growth.
Takes

inflation into account, allowing for


comparisons against other historical time
periods.

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Underground economy
Official GDP does not take into account the underground economy,
That is transactions contributing to production, such as illegal trade and taxavoiding activities, are unreported, causing GDP to be underestimated.

Sustainability of growth

GDP does not measure the sustainability of growth.

Quality of goods

People may buy cheap, low-durability goods over and over again, or they may
buy high-durability goods less often.
It is possible that the monetary value of the items sold in the first case is higher
than that in the second case, in which case a higher GDP is simply the result of
greater inefficiency and waste.

Non-market transactions
GDP excludes activities that are not provided through the market, such as
household production and volunteer or unpaid services.
As a result, GDP is understated. Unpaid work conducted on Free and Open
Source Software (such as Linux) contribute nothing to GDP, but it was
estimated that it would have cost more than a billion US dollars for a
commercial company to develop.
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Human Development Index (HDI)


Calculations uses: GDP, Indicators of life expectancy and education levels.

Happy Planet Index


It is an index of human well-being and environmental impact.
Measures the environmental efficiency with which human well-being is
achieved within a given country or group.

Wealth Estimates

Private Product Remaining

European Quality of Life Survey

Gross National Happiness


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