GROSS DOMESTIC PRODUCT(GDP) AND THE PARAMETERS AFFECTING THE GDP.

1. Prepared by
PRADEEP D

3.  Gross domestic product (GDP) is a monetary
measure of the market value of all the final goods
and services produced in a specific time period, often
annually.
 Nominal GDP estimates are commonly used to
determine the economic performance of a whole
country or region, and to make international
comparisons.
 Current GDP of India is 5%.

4.  CONSUMPTION (C)
-DURABLE GOODS
-NON DURABLE GOODS
-SERVICES
 INVESTMENT (I)
 GOVERNMENT SPENDING’S (G)
 NET EXPORTS (X-M)

5. GDP=C+I+G+(X-M)
consumption Investment
Government’s
expenditure
Net export

6.  ‘C’ is the private consumption of the economy.
 Private consumption, also referred to as personal
consumption, consumer expenditure, measures
consumer spending on goods and services.
Private consumption includes all purchases made
by consumers such as,
-food, housing (rents)
-clothing, health, leisure, education,
communication, transport as well as hotels and
restaurant services.

7.  These goods have longer life span.
 They are similar to the consumer
investment.
 Some of components of durable
goods include
-refrigerators
-washing machine
-toasters, etc.
 Durable goods contribute 5.4% for
India’s GDP.

8.  Non durable goods have shorter life
span.
 They contribute 23.3% for
India’s GDP.
 Some of components of non
durable goods are
- foods, groceries
- clothing
- newspapers, fuels, etc

9.  It is the fastest growing
components of consumer
purchases.
 It contributes maximum percentage
for India’s GDP.
 Services contribute 54.40% for
India’s GDP.
 Some of the components for
services include
- Real estate
- Health care
- Insurance
- Banking, etc

10.  Investment is defined as
investing as business
capital.
 ex. Investing in new
mining companies,
factories , etc.
 Investment contributes
31.6% of India’s GDP.

11.  ‘G’ refers to government’s
expenditure on goods and
services.
 Some of the government
expenditure includes
- Salaries
- Weapons for
militaries
- Education, Medical
,Research, etc

12.  Net exports are the difference
between a country's total
value of exports and total
value of imports.
 Depending on whether a
country imports more goods
or exports more goods, net
exports can be a positive or
negative value.