What is the Full Form of GDP?

The full form of GDP is Gross Domestic Product. The GDP is the total monetary or consumer worth of all finished goods and services produced within a country’s borders during a specific time period. It serves as a particular measure of overall domestic output, as well as a complete scorecard of a country’s economic health. 

GDP is the term used by economists to describe the size of the economy. The GDP growth rate is an important indicator of a country’s economic growth. People’s living conditions in the country are always rising as the GDP rises. A country with a high GDP is regarded as the best place to live. Agriculture, manufacturing, and services all contribute significantly to India’s GDP.

History of GDP 

Between 1654 and 1676, William Petty developed the core notion of GDP to protect landlords from undue taxes by the English and the Dutch. Charles Davenant later improved on this method. Simon Kuznets devised their contemporary concept in 1934. Following the Bretton Woods conference in 1944, it became the primary method for measuring a country’s economy.

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Types of GDP

There are several types of GDP, and these are as follows: 

Nominal GDP: The entire monetary value of all products and services produced at current market rates. This contains all current-year price changes induced by inflation or deflation.

Real GDP: The total worth of all products and services generated at constant prices is known as real GDP. The GDP is calculated using prices from a certain base year or the prior year. Because it is an inflation-adjusted indicator, the effects of inflation are removed, providing a more accurate picture of economic growth.

Actual GDP: Actual GDP is the real-time measurement of all outputs at any period or at any given time. It demonstrates the current situation of business in the economy.

Potential GDP: An ideal economic situation with full employment in all sectors and constant growth.

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