ECONOMICS

Economics

Economics

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant material relating to the analysis of Gross Domestic Product. GDP - gross domestic product is one of the main macroeconomic indicators, which characterizes the level of economic development of the country in absolute terms. Significance is determined by the market (sales) value of all final goods and services produced and used within the country. This takes into account only the end (directly intended for consumption) products and services, people who made the product are ignored. Gross domestic product (GDP) is widely used measures of the value of total economic activity of a region in a given period of time, typically a year. While these indices may be estimated for subnational regions, they are most commonly used in reference to countries (Sharp, 1999, pp. 78-88).

Thus, while GDP is primarily economic measure, it is also inherently spatial because it varies in absolute and per capita terms widely across the world. GDP is the sum of consumption, gross investment (not counting depreciation), government spending, and net exports. This measure is also equal to total employee income (wages and salaries) and profits (returns to businesses); thus, GDP is sometimes called gross domestic income. GDP may also be regarded as the sum of all profits added at different stages in production from raw material to final good (Menzies, 1995, pp. 21-34). A country's GDP is quite a narrowly defined quantitative, rather than qualitative measure of country's production of goods and services and can be quite an imprecise and misleading indicator of the economic well being of the inhabitants of a country. In the next section, the author will seek to justify the prior statement.

Discussion

GDP-Gross Domestic Product

The GDP measures the performance of an economy - but the measure has loopholes. The GDP measures the production of traded goods and services in markets. Where there are no markets, GDP has a problem. A second disadvantage is that when there are no direct competitive prices - for example in healthcare or government-related services, it is difficult to determine the value of GDP. GDP does not tell us how sustainable is the growth of the number of non-renewable resources are used for how much pollution it causes. But that is definitely a drawback. The first and best solution for the economists argue in the case is that you internalize the external costs. GNP assesses the total value of the goods and services produced by a given national group of people in a given year. Because statistically total output must equal total income and expenditures, it is also a measure of those two other dimensions of the economy. In typically macroeconomic accounting, GDP is the sum of consumption, gross investment (not counting depreciation), government spending, and net exports. This measure is also equal to total employee income (wages and salaries) and profits (returns to businesses); thus, GDP is sometimes called gross domestic income (John, 1998, ...