ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The calculation of a country’s GDP encompasses all private and public consumption, government outlays, investments, additions to private inventories, paid-in construction costs, and the foreign balance of trade. (Exports are added to the value and imports are subtracted).

Detailed explanation-2: -In calculating GDP, investment does not refer to the purchase of stocks and bonds or the trading of financial assets. It refers to the purchase of new capital goods, that is, business equipment, new commercial real estate (such as buildings, factories, and stores), residential housing construction, and inventories.

Detailed explanation-3: -Definition of. GDP long-term forecast. Trend gross domestic product (GDP), including long-term baseline projections (up to 2060), in real terms. Forecast is based on an assessment of the economic climate in individual countries and the world economy, using a combination of model-based analyses and expert judgement.

Detailed explanation-4: -Economic Considerations Business investment can affect the economy’s short-term and long-term growth. In the short term, an increase in business investment directly increases the current level of gross domestic product (GDP), because physical capital is itself produced and sold.