GDP and Its Approaches

What is the Gross Domestic Product (GDP)? Have you Ever thought how an economic activity is measured in a country? And what about the resources being utilized and the production being made within a country .  Well ! There are tools. And one of the tools is GDP , the “Gross Domestic Product” . By definition “It is a measurement of the value of all final goods and services produced within a year in a country”. So in the definition we have: Final Goods and Services. Produced within a year. Production within the boundaries of a Country. A break of definition shows that GDP only counts FINAL goods and services. Additionally it measures the production on yearly basis. Furthermore it also has the condition of counting the production that is within the boundaries of the country (See GDP Vs. GNP). GDP a Stock or a  Flow ? Now a stock is a quantity measured at a given point in time whereas, a flow is a quantity measured per unit of time. For Example : A person’s wealth is a stock while his income and expenditure are flows. Now GDP too, is a Flow, it tells how much money (dollars/rupees etc) are flowing around the circular flow per unit of time. But remember stock and flow are interrelated, because it is the flow that accumulates that as a result makes...

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