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GDP Calculation Theory
GDP Calculation Theory
Formulas
Calculatio
n Methods
CSO
modificati
on
Survey
Data
GDP Definition
Market value
All final goods & services
Produced within country
For a given time period.
Gross
Domestic
Product
++
++
Tatas dividend
from UK
NA
GDP vs Inflation
1.Current price
2.Constant price
3.GDP deflator
Base year:
2011
Constant Price
Rs.1 Lakh / car
GDP: 3 lakh
Present year:
2015
Current Price
Rs.1.5 Lakh /
car
Base year:
2011
Constant Price
Rs.1 Lakh / car
GDP: 3 lakh
Nominal GDP: 3
lakh
Real GDP: 2
lakh
GDP
Deflato
r
Nominal GDP{c.y
unit x c.y market price}: 3
lakh
Real GDP{unit
produce in c.y x base year
may jo price thi of that
}: 2
GDP Deflator=150
lakh
unit=2 unit x 1 lakh
100
Gross
National
Product
++
MINUS
Tatas dividend
from UK
++
Labor
Land
Capital
Entrepreneursh
ip
Factor Cost
Wage(W)
Rent(R)
Interest(I)
Profit(P)
Rs.1 Lakh
+ Taxes:
20k
- Subsidies:
5k
Market Price: 1.15
L
GDP
Market
Price
{un saare products
and service ki market
may pohochne ki
rate}
on the basis of
(+) GDP {GDP
Factors of production
@Factor cost}
Cost
Because goods and
services are sold in the
economy including
taxes
(+) Taxes
(-)
Subsidies
Gross
National
Product
@market
price
NNP
(MP)
(-)
Depreciation
TAX
SUBSIDY
NET
National
Product@
(Market
Price)
NNP(FC)
=National
income
CAUSE HAKIKAT MAY TO
YAHI GENERATE HUA
H.
(+) GDP
@Factor
Cost
GDP
Market
Price
(+) Taxes
(-)
Subsidies
(+) NNP
@Factor
Cost
NNP
Market
Price
(+) Taxes
(-)
Subsidies
1. Skip
2. Attempt
3. Mark n Review
88533
2014
2013
2012
2011
80388
71593
64316
GNP{MP
}
Depreciatio
n
NNP (MP)
D
A
RO
,
N
A
LO
A
R
G
O
D
,
T
N
A
T
N
N
O
I
M
O
R
AB Current
Transfer
National
Disposabl
e
Class 12 macro-economics
Chapter 2
+ glossary / appendix
Self Study
NCERT
So far
Formulas
Calculatio
n Methods
CSO
modificati
on
Survey
Data
Income
GDP
Calculation
3 methods
Expenditure
Production
(GVA)
Factor
Labor
Capital
Entreprene
ur
Land/Buildi
ng
Income
Wages
Interest
Profit
Rent
Total= GDP
GDP
Constant
@ market
prices
Inflation
adjust
GDP @Current
Market Price
Expenditure
Consumption
Private
Investment
Government
Foreign
Expenditure
1.
2.
3.
4.
Expenditur
e
Private
final
Expenditur
e
Investment
Consumption
Private
Investment
Government
Foreign
Expenditure
1. Salary to employees.Yes
2. FCI grain purchase = yes
3. Food coupon, LPG-DBT = no.
That money gets counted in
Private consumption.
4. Transfer Payments..No
[DBT, Pension, Scholarship,
food coupons etc.]
Expenditur
Governme
e
nt
Purchase
Consumption
Private
Investment
Government
Foreign
Expenditure
Money earned
from EXPORT
(+++)
Domestically
produced car
Foreign car
import
Not our
Domestically
produced car
Therefore Import
(- - - MINUS)
Private
Final
Expenditure
(+++)
GDP= C + I + G + (X M)
+Consumption (Final)
+Investment
+Government
Purchase
Foreign Expenditure
(Export-Import)
Expenditure
C + I + G + (X M)
Consumption, investment, Govt. purchase, Net export
Intermed
iate
Goods
Labor
Capit
al
Entre
p.
Land
Value
00
Wage(W)
Interest(I)
Profit(P)
Rent(R)
Rs.1 Lakh
Rs.1 Lakh
Rs.5 Lakh
Wage(W) Wage(W)
Interest(I) Interest(I)
Profit(P)
Profit(P)
Rent(R)
Rent(R)
5 Lakh
10 Lakh
GDP
4 Lakh
5 Lakh 10 lakh
SALE
Value
Cost
Interm
ed.
Goods
Rs.1 Lakh
5 Lakh
10 Lakh
00
1 lakh
5 lakh
GDP
Factor
Gross
Value
16
Lakh
6
lakh
16-6
=10
Expenditure
C + I + G + (X M)
Consumption, investment, Govt. purchase, Net export
Underground
Economy
Non-Marketed
Activities
Barter
Exchanges
-ve Externality
Opportunity
cost
Income
Inequality
H.D.I
GiniCoefficient
In future Economic
survey lectures on
So far
Formulas
Calculatio
n Methods
CSO
modificati
on
Survey
Data
T
er
ti
ar
y
c
o
n
d
ar
y
Agriculture
Forestry
Fishing
Mining
Transport
Communicati
on
Trade
Banking
Insurance
Computer
Public
Administratio
n
Defense
Pr
i
m
ar
y
S
er
vi
c
e
s
ASI
IIP
Economic
census
NSSO
Surveys
CBDT
CBEC
CPI-Indexes
G
o
o
d
s
Expenditure
C + I + G + (X M)
Consumption, investment, Govt. purchase, Net export