Gross domestic product and net domestic product are some of the most important indicators of macroeconomics. GDP shows the total market value of all services and goods produced within the country within 1 year. It is determined by all sectors of the economy and does not depend on how much of the output was exported, sold or accumulated domestically. Usually the domestic product is indicated in the national currency of the state. It can also be determined in US dollars.
The author of this term is Simon Kuznets, who proposed it in 1934 (USA). In 1971, he received the Nobel Prize. A close concept is the gross national product.
What is clean inner
This term refers to the difference between GDP and the amount of capital consumption:
PVP = GDP - QoP.
This is the formula for calculating the net domestic product. In the same way, the value of national income (NI) is determined. It turns out that ND = CVP.
GDP definitions
Gross domestic product is the total value of all goods and services produced within the country's borders for a period of 1 year. It is defined as the sum of value added for all sectors of the economy (or sectors) and net taxes on products.
This term is easily deciphered. The word "gross" (gross) means the sum of all values, and the word "internal" means that all goods were produced domestically. This is the explanation of what GDP is in the economy in simple words.
It is important to take into account that such an indicator is determined for all industries located within the borders of the state, even if they belong to foreign citizens and companies.
In the economy, GDP is considered one of the key indicators that quantify its size and development. If gross domestic product is growing, it means that the economy is developing. However, this does not always mean the development of the country as a whole.
GDP structure and size
The structure of gross domestic product varies sharply between different states, and also changes over time. In many countries, income from the sale of raw materials plays a large role in it. These include the Gulf states, some Latin America, Russia and some other states. In other countries, such as Japan, China and the United States, production of final products is more important. There are also such countries where tourism or banking services make a large contribution to GDP.
Rated and real
The nominal domestic product is determined in national currency at the current price level. In the presence of inflation, it increases, while in deflation, on the contrary, it decreases. Thus, it does not always reflect the state of the economy. In determining real GDP, a certain base price level is taken. The ratio of nominal to real gross domestic product is called the GDP deflator. If the indicator is measured in dollars or euros, then it will be more stable, since these currencies are less prone to inflation. For example, GDP in dollars will be defined as the nominal GDP in rubles divided by the number of rubles equal to one dollar.
What is gross national
Gross national product (GNP for short) is the total value of goods and services produced by all citizens and companies of the country. In this case, the link is made precisely with the manufacturers belonging to a particular country, while the geography of production is not taken into account. This is what distinguishes it from GDP.
What is GDP per person
This indicator is more important in assessing people's living standards than gross domestic product. It is calculated as the ratio of GDP to the number of inhabitants of the country. The higher the population, the more people share GDP among themselves. Moreover, this indicator does not take into account the distribution of gross product between different citizens. Thus, it is not sufficient for an objective assessment of the general level of human well-being and poverty in the country.
Which countries have the largest and smallest GDP
Traditionally, the United States comes first in terms of GDP. Smaller, but also huge, Saudi Arabia's GDP. This is due to revenue from oil production in this country. A rather high domestic product in Japan, China, Germany, France, Great Britain, Australia.
The lowest GDP in Central and East Africa. This is due to the scarcity of natural resources and the backwardness of these countries.
