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2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

Mrunal


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[Economy] 3 Methods of calculating GDP
Got this CSAT क ल क सब
ुह
question from
mail, 21 16 43 24
5
days hrs mins sec.

what are these  What's New?नया या?


income,production and expenditure methods in
calulating GDP?how do terms like NNP, NDP,
GNP,GDP,NNPFC,NNPMP DIFFER FROM EACH
OTHER. what is difference between gdp at
constant prices and current prices. its very
SEARCH B4 ASKING!
confusing
Search
I’ll deal with each question in one post. First, lets
LATEST COMMENTS
refresh the concepts again.
NIKHIL { well I
commented the same
GDP (Gross Domestic Product) means,
yesterday but some how it
did not pass the
Money value of everything you produce within
moderation phase I guess,
your country.
well trying my luck again, I
don't... } – UPSC uploads
(Domestic=within country). Top

hallticket for CSAT-2014, Everything means products and services.


http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 1/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

No change... GNP (Gross National Product) means,


BINTU CHAUDHARY
{ Thanks Big Bro...... } – The Money value of everything you produce
[Economic Survey] Ch13: within your country PLUS your income from
Demographic Dividend, abroad. Anil Kapoor goes to America, get 5 million
Education &...
dollar$ to play baddie in Mission Impossible 4,
HARIKRISHNARAJ but sends that money to India = counted in India’s
M.S { Thanks sir.. } –
GNP.
[Economic Survey] Ch13:
But with same logic, Cricket Coach Gary Kirsten
Demographic Dividend,
Education &... gets 50 lakh rupees from BCCI, and sends it to his
family in S.Africa, you’ve to deduct it from India’s
SRIKANT { All jats from
rajasthan are OBC GNP. (South Africans will count it in their GNP)
now..........correct that } – Similarly, Americans will subtract the dollar value
[Economic Survey] Ch13 of Anil Kapoor’s remittance to India while
P3: Human Resources- counting their GNP.
Minorities,...
So, what’ll be the (stupid) formula?
VK { Mrunal sir was Gross National production=Money value of
unable to download the
everything produced within India+Incoming
economic survey videos
money from outside-Outgoing money to abroad.
due to slow internet
speed...so articles are best Or you can simply say
to read...i was expecting GNP = GDP + incoming money from abroad –
the survey articles... } – Outgoing money to abroad.
[Economic Survey] Ch13:
Demographic Dividend,  How GDP calculated and what is are these
Education &... income, production and expenditure
SHUBHAM { Sir, I will methods.
appear for cse 2015 next
year, so will it be useful to
prepare the economic
survey of this year ( 2013- GDP is calculated by three methods.
14)? } – [Economic Survey]
Ch13: Demographic Theoretically all three of them should give same
Dividend, Education &... final number, but in reality there will be slight
SIKANDAR { "puri difference between each of them.
jawani nikal jayegi....."...
mast hai....... } – [Economic #A: EXPENDITURE METHOD OF COUNTING GDP

http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 2/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

Survey] Ch13 P3: Human Here you count the money spent by everyone.
Resources- Minorities,...

SRIKANT { Tripura So How to make a ‘technical’ formula? Ask


litreacy rate higher than yourself, where is the money changing hands?
kerala........change that } – There are five components of that.
[Economic Survey] Ch13:
Demographic Dividend,
Education &...

SUNIL YADAV { Sir this


is the thing for which most
of us use your website ;
economic survey simplified
! thankyou sir. } –
[Economic Survey] Ch13:
Demographic Dividend,
Education &...

सं
क प { @RAKA (Papa) Ab
kitane dudho nahalayega...
Jindgi bhar advice hi dega
ya khud bhi kuch karega... #1: CONSUMPTION BY PRIVATE CITIZENS [C]
Dusare ki chinta chhodh
"papa" wrna aise hi like you and me buying (overpriced) daal,
"dada"... } – UPSC uploads vegetables and milk (courtesy: Sharad Pawar).
hallticket for CSAT-2014, I buy your second-hand bike for 15,000 Rupees,
No change... should we including it in the consumer
KB { Since this all boils Expenditure (C) ? Nope. Because the bike Is not
down to politics now. (i am ‘produced again.
neither for nor against
CSAT just trying to look at
this politically) BJP has
nothing... } – UPSC uploads
hallticket for CSAT-2014,
No change...

RAHUL { Everybody
knows government is
going to scrap the CSAT. So
I suggest it dispense with
the bullshit statements of
"looking into the matter"
http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 3/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

and be... } – UPSC uploads


hallticket for CSAT-2014,
No change...

MEEK ONG { slow


connection ...you tube not
working in my place it's
better to have artcles
/PDF....THANKS FOR THIS
ONE } – [Economic Survey]
Ch13: Demographic
Dividend, Education &...

ALLISWELL { @ "Such
a good" .. I think its the
software that is
mistyping.... } – [Strategy]
How to prepare Current Second hand products are not counted
Affairs from...

HARIKRISHNARAJ When you had bought that bike for Rs.30000, 10


M.S { Thank you very years ago, we had counted that money in that
much sir.. (Videos are year’s GDP. So second hand-product sale money
hardly useful for south
cannot be counted in this year’s GDP.
Indians like me..:-)) } –
[Economic Survey] Ch13
Now, I buy your second-hand bike from an auto
P3: Human Resources- dealer, (who gets Rs.1000 Commission) should we
Minorities,... include it in the (C)? Hell Yes, because he sold his
KHUSHBOO { Thanks a ‘service’ to me uniquely. Every time he sells a
lot for the Economic second hand product, although no new ‘product’
Survey Articles Sir } – is created but new service is delivered by him.
[Economic Survey] Ch13 WHAT IF SAME 1000 RUPEE NOTE IS CHANGING
P3: Human Resources-
HANDS?
Minorities,...
RECRUITMENT

Exa m D ate s
IBPS:11 Oct to 2 Nov
SSC-CGL 2014:19 & 26 Oct
CAT:16 & 22 Nov
CDS:26 Oct
MAT: 7 & 13 Sep
http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 4/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

Ha llt ick ets up loa ded ?


CSAT-2014: YES
RBI Officer: YES
UPPSC: YES
Ba nki ng
11-Aug: IBPS 2014
06-Aug: RBI Assistants
30-Jul: Indian Bank Specialist
O n 2 013 RR B s cor e
19-Aug: Baroda Gramin
MB A
23-Aug: MAT-2014
06-Aug: CAT reg.Starts
Each service or product has separate value even if
Ut tar Pr ade sh
same currency note is used to purchase it
16-Aug: UP Food safety insp.
02-Aug: UP assistant
IT /Co mpu ter I gave a note of Rs.1000 to that dealer as part of
30-Aug: IITD Delhi system his brokerage (dalaali) and he gives the same
admin(3) Rs.1000 note to the electricity company for his
19-Aug: SSC 10+2 Data Entry monthly bill.
Op Same Rs.1000 note is changing hands so is our
04-Aug: UP Agro project
GDP =Rs.1000? Nope. GDP is the money value of
En gin eer s
everything produced within India. So brokerage
28-Aug: NIT Karnataka
service is Rs.1000 separately and the electricity
25-Aug: EIL Delhi
23-Aug: BPCL Assam
produced is also worth Rs.1000 separately.
22-Aug: Cement India Therefore, Even as same 1000 rupee note is given
20-Aug: Himachal Engg. to both parties.
14-Aug: IRCON Civil 20 Total GDP=1000 brokeage+1000 electricity
07-Aug: Delhi Electrical 50 bill=Rs.2000
(2yrXP)
If electri.co gives that 1000 rupee note to its peon
06-Aug: Oil India direct
as salary, then again it has to be counted.
interview
Because peon sold his unique service separately
01-Aug: MECL: Asst.manager
Po lic e/D efe nce /In tel .
to the company. So in that case
01-Sep: Army Vets Total GDP =Brokerge+Electric bill+peon^’
31-Aug: Army Dental salary=Rs.3000
29-Aug: Chandigarh Constbl
#2: Investment [I]
19-Aug: Hindi Translator ITBP
http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 5/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

18-Aug: CDS (II) People investing in sharemarket, putting money in


09-Aug: Airforce banks etc.
Meteorological
08-Aug: Army NCC entry #3: Government spending [G]
05-Aug: Navy UES
05-Aug: BSF Subinsp. Like buying (overpriced) sports equipment from
02-Aug: CISF constables(1203) Kalmaadi’s associates during Common wealth
31-Jul: ITBP sub-insp games. Government paying salary to staff, buying
Sp eci ali st
new tanks and missiles..everything.
E ntr anc e
19-Aug: CSIR NET #4, 5 :Export & Import [X & M]
04-Aug: CBSE CTET
B Com /HR /MB A Money we get from export is added.
01-Sep: ICAR account, admin You remember that GDP means Money value of
30-Aug: Accountant NIFFT everything we produce within India. So if we
Ranchi
import something, it has to be subtracted,
25-Aug: CPET Chennai
because it is not produced within India.
25-Aug: EIL Delhi
So formula (for ease In remembering)
11-Aug: SBI Mgmt.XO (2-5
GDP = Consumer+Investor+Governer + (eXporter – iMporter)
yrXP)
31-Jul: HUDA account Technically correct formula:
31-Jul: UPSC Specialists various
Me dic al /Al lie d  GDP(Expenditure)=C+I+G+(X-M)
19-Aug: Haryana Dental
19-Aug: Raj.Medical
14-Aug: AIIMS
#B: Income Method of counting gdp
09-Aug: SAIL Doctors
09-Aug: SAIL Paramedics
Here you count everyone’s income. But some
28-Jul: Chandigarh Paramedics
people may be running business in credit
L ega l
(udhaari), sometimes payments are delayed. So
25-Aug: Allahabad HC
clerk,review officer may not give the ‘full picture’ for the given year.
11-Aug: Uttarakhand HC
#C: Production method of counting gdp
deskjobs
Sc ien ce/ Agr i/O the r
Total money value of everything produced (value
30-Aug: Lab Attendent NIFFT
Ranchi
added at each stage)
14-Aug: ISRO assistants 233
1. Farmer produced Wheat and sold 100 kg of
http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 6/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

29-Aug: Raj.Agro research it @ 2000 Rs. (Original value)


25-Aug: CSIR-SERC 2. Flour mill, purchased it, grinded it and sold
22-Aug: Raj.Univ.Lab
the flour to baker @ 2500 Rs. (+500 value
Attendents 11
added to previous purchase)
22-Aug: ONGC Technician 137
3. Baker made breads, cookies and biscuits
20-Aug: NCL scientist
18-Aug: Karnataka Urban and sold the total production @3500 Rs to its
14-Aug: SSC Western Specialist final customers. (+1000 value added to
10-Aug: Gujarat Forensic previous purchase)
31-Jul: UPSC Specialists various
28-Jul: NIFTEM non faculty
what is total ‘GDP’ here?
Mi sc. Des kjo bs 2000+2500+3500=8000 Rs? Hell no! You’ve to see
30-Aug: clerks NIFFT Ranchi the value added.
19-Aug: SSC 10+2 Data Entry So, total money value of this line is:
Op 2000+500+1000=3500.
22-Aug: Raj.Univ.Clerks 29 Not all of the wheat goes into Baker’s oven. Some
14-Aug: BankPress Dewas
of it will go in making beer, some in a normal
12-Aug: Western Rail Sports
household for making roti and so on. You’ve to
01-Aug: MECL:
track the value added in each different line.
foremen,driver,mechanic(99)
31-Jul: Rohtak deskjobs
To be continued… GDP at nominal price, Market
31-Jul: NGT
price, Factor Cost, etc.etc.etc.
Secretary,Steno,Translators
Fa cul ty Job s
MRUNAL’S RECOMMENDED BOOKLIST
31-Aug: NIFM
29-Aug: Raj Lecturer
22-Aug: Kota univ.
 UPSC Civil Service
16-Aug: Shimla Nutrition  S SC CGL: S taff selection
14-Aug: Raj.Chemistry
11-Aug: Jammu Uni  IBPS Bank Exams
05-Aug: RIMSNR
 C DS: Defense Services
05-Aug: PGIMER
31-Jul: UP Paramedic  C AT/IIM MBA Entrance
War nin g
Online Form Part-1 stops Previously in this category
few days b4 deadline.So
DONOT wait till last date.
[Economic Survey] Ch13: Demographic
DONOT forget/misplace
Dividend, Education & Skill Development
reg.id, Roll number.
http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 7/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

schemes, National Youth Policy 2014

[Economic Survey] Ch13 P3: Human


Resources- Minorities, SC, ST, PH, Elderly;
USTAAD, Van Bandhu, Hamari Dharohar

[Economic Survey] Ch13 P4: Rural &


Urban Infrastructure, REITs, Smart Cities,
Swatchh Bharat, Rurban, Gram Jyoti

[Lecture] Economic survey Chapter 5, 6 &


7: Financial Intermediaries, Balance of
Payment, International Trade

[Lecture] Economic Survey Chapter 1,2,3


& Budget- Taxation, Deficits, Subsidies
MINUS Schemes

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अब तक 98 कम स लखी गयी

Roshani  30/05/2013 at 00:02


Finally got these GDP and GNP.
Reply

jogesh  15/06/2013 at 10:14


mrunal u r blog is uber useful n i really like the economy
part ….. the way u explain things is remarkable . u make
life easier when it comes to understanding economy…
Reply

Praveen  20/06/2013 at 12:28


You said that
GNP = GDP + incoming money from abroad – Outgoing
money to abroad.

http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 8/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

But then again you said GDP(Expenditure)=C+I+G+(X-M)


where x and M are incoming money from abroad and
Outgoing money to abroad, which is contradicting the
statement that GDP and GNP are different except for
imports and exports.
Reply

Alok  29/08/2013 at 20:55


Praveen,
It gets simpler, if you see GDP and GNP in their
own contexts.
1- GDP is estimated value of the total worth of a
country’s production and services, “on its land”,
by “its nationals and foreigners”, calculated over
the course of one year.
However, GNP is estimated value of the total
worth of production and services, “by citizens of
a country”, on “its land or on foreign land”,
calculated over the course on one year
2- Simply saying ‘Anil Kapoor going abroad
working for MI-4′ will not be counted in our GDP
instead, it will be counted in GNP . However,
‘Gary Kirsten gets 50 lakh rupees from BCCI’ will
be counted in our GDP and not in GNP.
Now, a country’s GDP is a good parameter for
analysing the country’s economy locally but for
global analysis and standing of a country you
would require GNP value instead.
Hope, i helped.
Reply

Sailesh  21/03/2014 at 00:53


Thanks for very nice explanation….. little
doubts of mine also removed
Reply

Sailesh  21/03/2014 at 00:53


Thanks for very nice explanation….. little
doubts of mine also clarified
Reply

prakash  25/06/2013 at 15:34


http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 9/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

so nice
Reply

abhi  29/06/2013 at 23:11


sir will u analyze the upsc changed syllabus, especially
on world history.& also will u provide some notes(in ur
humorous ad lucid way),on Development processes
and the development industry- the role of NGOs, SHGs,
various groups and associations, donors, charities,
institutional and other stakeholders.eagerly waiting
Reply

Harsha  05/07/2013 at 16:45


For the forthcoming RBI GRADE B exam— For Economy
and Current affairs How many months Backdated
information should i be covering from a exam
perspective for August 2013 Exam
Reply

Sumeet  08/07/2013 at 01:09


This is the best website to understand everything about
the Indian economy.
Reply

goutham  22/07/2013 at 09:20


sir doubt…!! which method is currently used by our
country..?
and which method is more easy to calculate..?
Reply

aravind  24/07/2013 at 08:24


nice one sir ji
Reply

sanjaya  25/07/2013 at 16:03


hey thanks a lot u have explain it in such a way by
including instances a lay man will be get it clearly……be
continue
Reply

Arvind  31/07/2013 at 12:01


finally i learnt to calculate GNP…
Reply

kishan  06/08/2013 at 19:31


http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 10/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

Sir, Your article is very useful and informative. thank you


Reply

NILADRI GARAI  12/08/2013 at 00:56


The concept given in NIOS ECONOMICS START UP
MATERIAL L-11.3 MEANING OF NATIONAL’ is
contradicting with the concept given here although this
concept matches with NEW NCERT CLASS XII
MACROECONOMICS 2.3.chapter 2.3 named ‘some
economic identities’ page 23).
Reply

Amanda  12/08/2013 at 19:54


I really like your blog, it makes me easy for me to learn.
I’ve been confuse a little.
Reply

puneeth  20/08/2013 at 22:06


i really like your blog, it makes me easy for me to learn.
I’ve been confuse a little.
Reply

saket shandilya  23/08/2013 at 23:33


we say gdp is 4.8 percent… now 4.8 percent of what????
Reply

Alok  31/08/2013 at 10:17


Thats not gdp .. thats actually GDP growth rate
calculated annually YoY(Year over Year) or
quarterly QoQ(Quarter over Quarter)
Reply

durgesh kumar singh  12/09/2013 at 16:14


mrunal sir a lots of thanks to teach in such a easiest way
,the fundamentals of gdp nd calculation of it.
Reply

Sridhar  18/09/2013 at 11:08


Mrunal Great work, your content on GDP helped me lot
to understand the concept. want you to continue the
GDP chapter further for depth understanding.
Thanks
Reply

Pankaj  20/09/2013 at 17:57


http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 11/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

Why GDP is shown as our growth rate axept NNPfc?????


Reply

ADARSH SINGH  27/09/2013 at 13:00


GDP NDP GNP etc etc:-these all we calculating to see
the economic condition of country in different way.
New thing is to learn here is that the most of the
countries are following same method to calculate
GDP,NDP,GNP……do u want to know why ????? bcz
most of the country has taken copyright for this
calculation from UN(United nation) country.thats the
reason allmmost all countries are following same
method.
Now a days this cocept (GDP,NDP,GNP) are adepting by
company also…yes.they call this GVA,NVA & EVA.
There are very interesting and value added thing for
those who are doing Finance,Marketing ..
Reply

tenc  27/09/2013 at 16:00


Thank you Murnal Sir.you explaining economy in
simplest way,which look complex when i read books and
Surf internet,because lot of things are dumped there.
Reply

ashish  27/09/2013 at 23:24


sir! i want to clear my doubt ..you have quoted “15000″
wont be calculated in GDP because it is a second hand
product…. but the seller who got that amount after
selling ….can use this money in the development of
other unique service or product.. by this “15000″ will be
included in GDP..
Reply

Dee  11/10/2013 at 05:13


Yes, even I am stucked here.If broker’s 1000
service charge is counted in GDP because it will
eventualy be translated in to different service
(ultimately summing upto 3000 in GDP), then
why the second-hand bike sold at 15000 is not
considered. The seller can use the 15000 in
paying to same electricity company and thus the
money changes hands..
Please Sir, clarify .
http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 12/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

Reply

suneet  08/12/2013 at 07:39


Hi DEE
did u find any answer on this . i am also
stuck here.
should there be some criteria like
GDP=domestic(investment –
disinvestment).
Reply

Madhukar  05/01/2014 at 16:04


You are right
Reply

Madhukar  05/01/2014 at 16:03


you arre dee
Reply

manoj  04/02/2014 at 14:29


that 15000 is not calculated as he
bought that bike in past at 30000. (No
new Item or service produced.)
that 1000 rs has been added in GDP as
he receives that amount due to some
services(New) provided.
Reply

sonwane karuna  25/10/2013 at 13:50


This site is one of the best source for economics nd also
all the subjects for us. thanks to publish it.
Reply

sonwane karuna  25/10/2013 at 13:52


so nice nd helpful.
Reply

Prabhat  05/11/2013 at 23:38


good .
Reply

shilpa  06/11/2013 at 19:50


Being an economics teacher, I still found the content
much more informative and easier. Appreciate your
effort, keep it up.

http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 13/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

Reply

harneet singh  21/11/2013 at 21:31


sir i m having a sense ov satisfaction after reading
dis…… i m preparing fr civil service…………… its so
lucidly explained…….how 2 contact you in case i have 2
ask smthng…..
Reply

Chaitanya  02/12/2013 at 23:47


Really very good explanation
Reply

suneet  08/12/2013 at 07:21


Sir,
suppose goods worth 10 millon are produced. but sold
are 8 million worth . what will be GPD? 10 million or 8
million . please give the logic behind it as well.
Reply

gerrard@ynwa  29/06/2014 at 18:57


it will be wort 10 million. as initailly its the 10
million worth of production added in the
econoly . dont bother bout that diminished sale.
answer would be 10m.
Reply

vinamra  09/12/2013 at 12:50


sir , u have given an example in GDP counting
production method, in that wheat is produced by
farmer and going to different sectors like bakers , flours
etc out of his total production he is giving to another
sector then how can we count agriculture sector
individually and how can we say agriculture sector
diminishing though it is sharing with other like sugar
cane , milk , wheat etc
Reply

Madhukar  05/01/2014 at 16:17


Yes you are right but when produce wheat its
value added in GDP. But when it goes to flour
producer, he has to processed it so that
additional cost cost is added. likewise if bakers
make bread what cost he incurred in is added i
final GDP not entire wheat, flour and bread price

http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 14/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

We say agriculture sector demising because


year on year production of food garin is not
increasing a s we targeting. it means if we
produced 250 MT of food grains last year, in this
year we managed to produce only 255 MT. there
only 2% increase i food grain production.
Reply

ansonjerrin@gmail.com  19/02/2014 at 10:19


Amazing Blog. You have made the understanding very
easy.
Em gonna share it on FB :)
thank you for simplyifing GDP & GNP
Reply

Aymen  23/02/2014 at 20:31


hey im from Pakistan i must say ur blog is
awesome.really very helping ;)
Reply

Pavan  26/02/2014 at 15:10


Dear Mrunal,
This comment is regarding the example titled “WHAT IF
SAME 1000 RUPEE NOTE IS CHANGING HANDS?”
Here , although Rs 1000 is being paid to the peon by the
electricity company , since it is included in the cost the
company charges to the customers ( which here
incidentally is Rs 1000 only!), shouldn’t it be dropped
from final GDP calculation ?
i.e shouldn’t the final GDP be Rs 1000 ( brokerage) + Rs
1000 (Final good + service – electricity production +
supply) = Rs 2000 going by value addition method ?
because, comparing and contrasting this with the Baker
example reveals that we are not adding the wages the
Baker must be paying to his assistants if any !
Reply

lake chaitanya  12/04/2014 at 21:54


hi mrunal .. previous articles of economy not opening
what shall i do?
Reply

caustic576  16/04/2014 at 23:44


Crucial difference to note here:

http://mrunal.org/2011/04/economy-3-methods-of-calculating-gdp.html 15/17
2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

In Expenditure approach, under “Investment” portion-


“Investments in stock market” are not ALWAYS to be
accounted for GDP calculation. Investment in the
primary market (IPOs) is ONLY to be considered;
investment in buying shares off of another holder in the
secondary market is to be excluded (no net addition to
the value in the economy).
@Mrunal can correct me if I’m wrong.
Reply

shweta  20/07/2014 at 22:10


helpful blog..thanks
Reply

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2/8/2014 [Economy] 3 Methods of calculating GDP - Mrunal

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