2. Gross domestic product (GDP) is
the market value of all officially recognized
final goods and services produced within a
country in a given period of time.
GDP per capita is often considered an
indicator of a country‘s standard of living.
Eg: If we say GDP is up by 3% last year, it
means economy has grown by 3%.
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3. Is a major economic activity indicator
Represents business activity
Economists rely on this data to determine
growth or decline of economy
Helps investors to know where to
invest/allocate the money
Unemployment is an indicator of shrinking
GDP
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4. Ifthe economy appears to be growing too
fast and GDP has shown a pattern of
steadily rising, policymakers might
evaluate whether a change needs to be
made to interest rates in order to keep
inflation under control.
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5. Product Approach
- Market value of all final goods and services calculated
during 1 year
Income approach
- Sum total of incomes of individuals living in a country
during 1 year
Expenditure Approach
- All expenditure incurred by individuals during 1 year
All the above approaches should have the same result
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6. Gross national product (GNP) is the market
value of all the products and services produced in
one year by labour and property supplied by the
residents of a country.
Basically, GNP is the total value of all final goods
and services produced within a nation in a
particular year, plus income earned by its citizens
(including income of those located abroad), minus
income of non-residents located in that country.
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7. It indicates the economic condition of the country.
Helps compare own country’s economic condition with
other countries
Study of GNP guides us to make policies for
saving,investment and consumption
Gives information on distribution of wealth.
Gives information about the contribution of various
sectors of the economy eg:agriculture,industrial
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8. Throws light on source of employment
Tells about rate of economic growth
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