ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -Gross Domestic Product (GDP) of a country is the sum of all the final goods and services produced in all the three sectors in a particular year. It shows the total production in a country. It shows how big the economy of a country is, in a given year, in terms of its total output.

Detailed explanation-3: -GDP measures the monetary value of final goods and services-that is, those that are bought by the final user-produced in a country in a given period of time (say a quarter or a year).

Detailed explanation-4: -If we talk about a simple approach, it is equal to the total of private consumption, gross investment, and government spending plus the value of exports, minus imports i.e. the formula to calculate GDP = private consumption + gross investment + government spending + (exports – imports).

Detailed explanation-5: -As an aggregate measure of production, GDP is equal to the sum of the gross value added of all resident institutional units engaged in production, plus any taxes on products and minus any subsidies on products.