GDP – concept explained easy

Gross Domestic Product(GDP) is the final monetary value of the products produced and services rendered in a country during a specific period.

In India, the Central Statistics Office calculates the Gross Domestic Product of India, and the final GDP figure published on 31st May every year.

Why is it essential?

Gross Domestic Product depicts the robust economic activity in a country, which means an increase in production, investment and employment. All these parameters define the wellbeing of the country. Besides measuring the economic health of a country, it also assists the government in formulating policies.

Ways to measure GDP

Following are several ways to do it:

GDP at factor cost vs GDP at market price

Bottom line

As the entire economy cycle runs on a retail value chain, which runs from a producer to consumer, and the government and businesses are intermediaries in it. Hence, we can say that GDP is an output of this cycle. If the cycle gets disturbed at any point, it affects the GDP growth rate.

#GDP #Inflation #Products