Growth Domestic Product : The Gdp Essay
The GDP is an estimate of the total value of goods and services produced in a country, which aims to determine the monetary value of an economy (Investopedia GDP, 2016).
The GDP is calculated by the following equation: GDP = C + I + G + (X - M) or GDP = private consumption + gross investment + government investment + government spending + (exports - imports) (Investopedia GDP, 2016). In summary the aforementioned equation is the monetary value of all the finished goods and services produced within a country 's borders in a specific time period. Though GDP is usually calculated on an annually, it can be calculated on a quarterly basis as well.
The GDP has been renown as the best aggregate measure of economic activity available on a global scale. In addition, it 's the measure referred to when measuring an economy growing or contracting.
Economic growth is defined as an increase in the amount of goods and services produced per head of the population over a period of time (Investopedia, 2016).
It is commonly measured as the percentage of an increase in real GDP, or real GDP, in per capita terms. Although there are a variety of alternate economic indicators which can assist when calculating economic growth such as GNP per capita, population growth, urbanisation, consumption per capita, infrastructure and Social Conditions.
GDP correlation to economic growth:
GDP is a type of economic tool that is utilized by governments and economists…