GDP full form:
The full name of GDP is Gross Domestic Product. These are the basic measurements of the economic performance of an economy. This is the market value of all final goods and services within the limits of a nation in a year.
What is GDP:
Gross domestic product is a method or measure to measure the economic health of any country. The calculation of GDP in India is every quarter. The GDP figures are based on the growth rate of production in the major production sectors of the economy.
Agriculture, services and industries are the three major components under GDP. GDP is determined on the basis of average increase or decrease of production in these areas.
Gross domestic product can be defined in three ways:
1) It is equal to the total expenditure incurred for all final goods and services produced within a country in a given time period.
2) GDP is equal to the sum of the total value added at each stage of production and subsidized tax on products at all stages of production within a country.
3) These are equal to the sum of income generated by production in the country over a period.
The gross domestic product is presented in two ways:
Production prices keep decreasing and increasing with inflation. This method is named Content Price. Under which the rate of GDP and the value of production are decided on the price of production in a base year, while the other way is the current price GDP which includes the inflation rate of the product year.
The statistics department of India prepares a base year for evaluating production and services. During this year, the price of production and the comparative growth rate are decided on the basis of prices and this is the cost price of GDP. This is done so that the DR of GDP can be measured correctly keeping it separate from inflation.
If the rate of inflation is added to the production value of GDP, then we get the current price of economic output. That is, the cost price has to be linked to GDP with the immediate inflation rate.