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Definition 3 ways of definition Total expenditure for all final goods and services produced within a country in stipulated period of time 2. Sum of value added at every stage of production by all industries within a country + taxes less subsidies on products in the period 3. . Sum of the income generated by production in the country in the period!! 1.
Indian economy has huge scopes in the future to become one of the leading economies in the world. telecommunication. secondary sector or manufacturing sector.Points to remember while calculating GDP Diversity of the Indian Economy. such as primary or agriculture sector. and tertiary or service sector. . Different sectors contributing to the GDP - agriculture. petroleum. The different sectors classified into three segments. textile. information technology. etc. manufacturing. With the introduction of the digital era.
aviation. manufacturing. shipbuilding. telecommunication. India has become one of the most favored destinations for outsourcing activities. India at present is one of the biggest exporter of highly skilled labor to different countries The new sectors such as pharmaceuticals. nanotechnology. biotechnology. India has become one of the most favored destinations for outsourcing activities. and tourism would experience very high rate of growth .
shipbuilding. aviation. and tourism would experience very high rate of growth . telecommunication. biotechnology. nanotechnology. India at present is one of the biggest exporter of highly skilled labor to different countries The new sectors such as pharmaceuticals. manufacturing.
“Gross" means that depreciation of capital stock is not subtracted out of GDP .Expenditure method formula Measuring and quantifying GDP Formula: GDP = C + I + G + (X-M) OR GDP = Consumption + gross investment + government spending +(exports – imports).
then the formula for NET DOMESTIC PRODUCT is obtained. If net investment (which is gross investment minus depreciation) is substituted for gross investment in the equation above. .NET DOMESTIC PRODUCT .
DIAGRAMMATIC REPRESENTATION CONSUMPTION GROSS INVESTMENT GDP GOVERNMENT SPENDING (EXPORT-IMPORT) .
Personal expenditures mainly consists of: food households medical expenses rent. For example. . if a hotel is a private home then renovation spending would be measured as Consumption. etc.C for consumption C -> CONSUMPTION Includes:.
Expenditure on new houses. Purchase of software. NOTE:: Investments on financial products is not included in Investments Example. Buying goods and services. that is private investment .Includes: Construction of a new mine. If you spend money to renovate your hotel so that occupancy rates increase. Purchase of machinery or equipment for factory. .I for investment I : investments by business or households in capital.
Includes :: Investment expenditure by the government.G for government expenditure G : Total government expenditures on final goods and services. Example: if a government agency is converting the hotel into an office for civil servants the renovation spending would be measured as part of public sector spending . Purchase of weapons for the military Salaries of public servants.
Includes :: All goods and services produced for overseas consumption. If a domestic producer is paid to make the chandelier for a foreign hotel. .X FOR EXPORT X : Gross Exports. Example. the payment would be counted in gross export.
M for import M : gross imports. Includes :: Any goods or services imported for consumption Example. If the renovation of hotel involves the purchase of a chandelier from abroad. that spending would be counted in gross imports .