ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. As such, it also measures the income earned from that production, or the total amount spent on final goods and services (less imports).

Detailed explanation-2: -Gross domestic product (GDP) is the most commonly used measure for the size of an economy. GDP can be compiled for a country, a region (such as Tuscany in Italy or Burgundy in France), or for several countries combined, as in the case of the European Union (EU).

Detailed explanation-3: -GDP Formula GDP = private consumption + gross private investment + government investment + government spending + (exports – imports).

Detailed explanation-4: -The size of an economy is typically measured by the total production of goods and services in the economy, which is called gross domestic product (GDP). Economic growth can be measured in ‘nominal’ or ‘real’ terms. Nominal economic growth refers to the increase in the dollar value of production over time.

Detailed explanation-5: -If, for example, Country B produced in one year 5 bananas each worth $1 and 5 backrubs each worth $6, then the GDP would be $35. If in the next year the price of bananas jumps to $2 and the quantities produced remain the same, then the GDP of Country B would be $40.