Measurement of GDP under product method

1. MEASUREMENT OF GDP UNDER
PRODUCT METHOD
PRESENTED BY:: RISHI Ram KHNAL
BIM 5TH Semester (TU)
108
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2. CONTAIN
 Introduction
 GDP under product method
 GDPs different approach
 Component of NI under product method
 Example
 Conclusion
 Reference
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3. INTRODUCTION
 GDP is the total unduplicated value of the goods
and services produce in a country in given period
 GDP can be measured in three ways
1 production approach
2 income approach
3 expenditure approach
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4. GDP UNDER PRODUCT METHOD
 Product method is called the net product or value added
method
 GDP is sum of value added by intuitional unit plus tax and
import less subsidies on product.
 There are two approach method under this
final product and approach method
final product approach
 This method include only final goods and services to
calculate GDP
 Mathematically in final product approach
 GDPmp=total product of (primary sector +secondary sector
+ tertiary sector)
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5. Value added approach
 In this method adding the value of goods and
services at each stage of production
Mathematically
Value added=value of output –cost of intermediate
cost
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6. COMPONENT OF NI UNDER PRODUCT METHOD
 Production made by primary sector ( forestry,
agriculture, food crops ,cash crops ,animal
husbandry , mining etc
 Production made by secondary sector(gas , water
,manufacturing ,construction ,supply
 Production made by territory sector(service sector :
banking , transport and communication , health
and education
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7.  Net factor income fro abroad
 Deprecation
 Net indirect taxes : which is the difference between
indirect taxes and subsides
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8. EXAMPLE OF CALCULATION OF GDP BY FINAL
PRODUCT METHOD
Description Quantity Price Amount
Wheat 100 10 100*10=1000
Cloth 200 20 200*10=2000
Noodles 300 10 30*10=3000
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9.  Solution……
GDPmp = P1Q1*P2Q2*P3Q3
=100*10+200*20+300*10
=Rs 8000
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10. CONCLUSION
 Product method of calculation of GDP is simple
method
 Its easy compare to income and expenditure
method
 It is simple to understand
 Easy to calculate
 Save time etc
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11. REFERENCE
 Text book of ARCHDIA publication
 www.ecosolution.com
 www.slideshare.com
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