GDP Full Form

by Yogi P - August 23, 2023

What is the full form of GDP?

Full form of GDP is Gross Domestic Product.

What does GDP stand for?

GDP stands for Gross Domestic Product. It represents the total value of goods and services made in a country during a specific period. Think of it as a country’s economic scorecard. A higher GDP often means that people in that country have a better standard of living. In India, the main contributors to GDP are agriculture, manufacturing, and services.

A Glimpse into GDP’s Past

The idea of GDP dates back to the 1600s when William Petty introduced it during disputes between English and Dutch traders. Charles Davenant later refined this idea. However, it was Simon Kuznets in 1934 who gave us the modern version. By 1944, after the Bretton Woods conference, GDP became the main way to measure a country’s economy.

How do we calculate GDP?

There are three main ways to determine a country’s GDP:

1. Income Method: This focuses on the total earnings or income in a country.Formula: GDP = Income from Production – Subsidies + Taxes
2. Output Method: Here, we look at the total value of goods and services produced.Formula: GDP = Value of Production + Taxes – Subsidies
3. Expenditure Method: This approach adds up everyone’s spending on goods and services.Formula: GDP = Consumer Spending + Business Investments + Government Spending + Net Exports (Exports – Imports)

In simpler terms, GDP can show us how well a country is producing and earning. The higher it is, the better the economy might be doing.