What is GDP?

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What is GDP?

Gross domestic product (GDP) refers to the main indicators used to assess the state of the economy in the country. Let's talk in more detail about what GDP is and what this indicator means.

GDP indicates the total cost of services and goods,which were produced in the state for a particular period of time. Usually GDP is expressed by comparison with the previous quarter or year. Example: if GDP grew by 5% over the year, this means that the economic situation has improved by 5%.

The GDP includes the cost of all material andintangible goods. Are not included in GDP spending on goods purchased in previous years, and spending on the purchase of intermediate goods (materials, fuel, energy, etc., which are used to produce the final product).

Types of GDP

Nominal and real GDP

Nominal GDP is the cost of all services andgoods in a particular region or state is determined by market prices. Nominal GDP is dependent on changes in the price and income index. It grows with inflation due to rising prices for products and services and is declining due to falling prices.

When real GDP is taken into account, exactly how GDP growth depends on production growth, rather than price growth.

GNP - Gross National Product

TOP 10 GNP for the year 2010.It reflects the total value of the benefits created by its residents, regardless of their location.

GDP per capita

An important indicator of economic well-being in theregion or country. For its calculation, GDP should be divided by the number of people. For comparison of data in different states, this indicator is used by GDP calculated on the basis of PPP.

PPP GDP

PPP (purchasing power parity) isthe ratio of two or more monetary units of different states, which is determined by their purchasing power is applicable to certain services and goods.

Calculation of GDP

Generally calculate the income and expenditureOf GDP. Profitable GDP is the total amount of what was earned over the year. Expenditure GDP is calculated by calculating the amount of what was spent for the year. Also, GDP is often calculated by adding value.

How GDP is calculated, you can read in the article How to Calculate GDP.

GDP Ratings

GDP of different countries for 2012-2014.If you look at the data for 2013, you can bring the GDP rating (by PPP) from the first to the ninth place:

  1. USA.
  2. PRC.
  3. India.
  4. Japan.
  5. Germany.
  6. Russia.
  7. Brazil.
  8. France.
  9. Indonesia.

If we consider GDP per capita, then the first line of leaders will be occupied by Qatar, Luxembourg and Kuwait. Russia ranks 44th in this rating.

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