ECONOMY

CLASS 5
Factors influencing Economic
Growth
 Human Resource
 Infrastructure Development
 Planned utilization of natural resources
 Population Growth
 Advancement of Technology
Economic Growth Vs Economic
Development
Economic Growth Economic Development
Increase in the production of goods and Economic Growth leads to improvement in
services the general welfare of people- Economic
Development

Quantitative in nature Qualitative in Nature

Uni-dimensional Multi-dimensional
Can happen without development Cannot happen without growth
Indicators- Real GDP, Real Per capita Indictors- Human Development Index,
income Physical quality of life Index etc.
GDP(Gross Domestic Product)

 All final Goods and Services that are produced

in our country during a financial year is called
GDP.
GROSS NATIONAL PRODUCT(GNP)

 GDP+ Net Factor income from abroad.

Basis GDP GNP

Meaning Value of all final goods and Value of all finished goods
services produced in the and services owned by a
domestic territory in a country’s residents over a
specific time period period of time

Method of Calculation Consumer spending+ govt GDP+ NR(Net receipts from

spending+ investments+ net abroad) – NP (Net Payment
exports to abroad)

Produced by whom? Produced in India (by an Only those good and services
Indian or Foreigner) produced by Indians whether
in India or abroad

Net Factor Income from Exclusion of net factor GNP includes net factor
income abroad income abroad
Net Domestic Product (NDP)

 Depreciation: Loss in the value of capital due to normal

wear and tear during production process.
 GDP- Depreciation= NDP

Net National Product (NNP)

 GNP- Depreciation= NNP
GDP at market price and factor
price
 GDP at market price= GDP+ taxes- subsidies
 GDP at factor price= GDP-taxes+subsidies