What is GDP (Gross Domestic Product) -- GDP is the total monetary value of the final goods and services produced within the geographical boundaries of a country in a given period of time.
For a more detailed explanation of the terms:
GROSS: The depreciation in the capital assets of the country, occurred during the year is inclusive. This means, the monetary value of loss of assets due to production activities had not been deducted. If we do deduct it, it becomes NET.
DOMESTIC: Domestic implies, produced within the geographical boundaries. It does not take into account the country's earning outside its geographical boundaries, or foreign remittances. Neither does it deduct transfers outside of the country. If these remittances are added and the transfers deducted, the value becomes NATIONAL.
PRODUCT: The final goods and services. Final implies that intermediate goods are not taken into account. For example, wheat sold for final consumption to consumers will be taken into account, but the amount of wheat sold to bakeries for further production of bread will not be added. The value of bread will be taken into account which will be inclusive of the value of its input: wheat. This is done to avoid double counting.
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I am not clear with the GDP calculation. By definition, GDP is the value of all final goods and services produced within the geographical boundaries of a country. So why do we consider Net Foreign Factor Income in calculations for GDP at Factor cost? (NFFI = income earned by the rest of the world in India – income earned by India from the rest of the world ). As per the mathematical formula of NFFI here, don't you think NFFI calculation involves earnings made by Indians and Indian entities in foreign countries, so going by the definition of GDP, NFFI should not be included in GDP calculations. Please clarify my doubts.
By definition , GDP sounds nice.
In practice, GDP can be faked because no one outside the gov has all the data and no one can independently audit the figures to verify it's accurate to the decimals.
China cannot audit the gdp of USA and vice versa. GDP is Political number. Politics is full of lies
Now days many foreign cell phone companies like vivo , oppo , mi are assembling there products in India however spare parts are imported . Will this come under intermediate goods or final goods. Will it be considered to caluculate GDP ?
sai ram charan kumar it's been three month since you have asked this question.. I hope u found the answer by now. India has now 💯% fdi in mobile manufacturing that's y the boost in mobile production. However to calculate GDP the duties/expenditure on import of units would be deducted from the value of mobiles assembled in India. Don't know for sure. But If u found the right do share.
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