On this page, We are going to learn about the full form of GDP and the meaning of GDP, As well as the meaning, definition, and acronym for GDP in different categories. So you should read this post till the end.
Full Form of GDP: Gross Domestic Product
GDP Stands for Gross Domestic Product. GDP is the market value of all the finished goods and services produced within a country’s borders in a given time period.
GDP is one of the most important measures of the economic performance of a country and It is the most commonly used indicator of the economy’s health.
- The gross domestic product (GDP) is a measure of the size of the economy of a country or area.
- It is the total value of all final goods and services produced in a certain time period.
- GDP was invented by American economist Simon Kujlett from 1935 to 1940.
- at that time it was used to measure the GDP of America, and after that, it was used by all countries to measure their country’s economy and GDP.
- For example, if a country’s economy grows by 20% over a year, it means that its GDP has increased by 10%.
- in short, A higher GDP is often considered to be better. For example, a country with a GDP of $1 trillion is considered to be richer than a country with a GDP of $100 billion.
History of GDP
American economist Simon coined the term GDP in 1935-44. During this time, the world’s largest banking institutions worked on measuring a country’s economic development.
Yet until then, no such parameter could be fixed, making it easier to explain to others the country’s economic development.
The US Parliament, also known as the Congress, is where economist Simon introduced the GDP, which most people supported.
This term was then adopted by the International Monetary Fund (IMF). After that Economic growth is calculated using this term after it was introduced by the International Monetary Fund (IMF).
How is GDP Calculated
If a country produces 100 cars in a year at a cost of Rs 200,000 per Car, the GDP of that country will be 100X200,000 = 20000000.
It is a common example, but it is not so easy to measure GDP, many other things have to be taken care of while calculating GDP. so a formula has been made to calculate GDP.
| GDP = C+I+G+(X-M) OR GDP = C + I + G + Net Exports |
| C – Consumer Expenditure I – Industries Investment G – Government Expenditure X – Export M – Import |
If an item is made in India and sold in USA, then it will be added to GDP while calculating GDP of India, but if an item made in USA is brought to India and sold then it will not be calculated in India’s GDP.