For those who follow the economic news of the abbreviation familiar, and the question is what GDP is not worth such people. For those who do not know its decoding, you can only advise to correct this misunderstanding, because GDP shows the common welfare of the country. In order to additionally improved this indicator, the economic literacy of the population should increase, because the more its importance, the more money is in the state, and the more potential needs can be satisfied. There is additionally a question of the distribution of money that the maximum number of needs is satisfied, but this is a separate case. So, go to the answers to the question what is GDP, and how it is measured.
How deciphered GDP and what does it mean?
The decoding is very simple - the inner gross product. In other words, everything that was produced in the territory of a certain country. It is used to calculate the material benefits that were manufactured by resident residents in order to follow the implementation of both in the country and its border. The cost is taken into account with all the prepared products. So, if semi-finished products are made in one enterprise for later use in this enterprise itself to create a final product, the cost of fabrics is not considered in the gross domestic product, but only the cost of the final product. It is easy to remember this a little definition so that when you need to answer the question of what GDP is.
Why calculate GDP, and who does it?
The inner gross product is calculated in order to know an approximate economic condition in the country, and also that the government can, relying on real economic power, plan the future of development. When counting everyone needs to remember that real GDP is equal to the cost of all produced and ready-to-use products that are sold or can be potentially sold to various individuals or legal entities. Conditionally, everyone who counts GDP can be divided into 2 types: state and private branch.
State presents the Statistics Committee and various services, the responsibilities of which include collecting statistical data (tax service and other). From the side of the private - various banks that calculate their own data based on open sources of information. Unfortunately, it is not possible to calculate accurate GDP due to the presence of the shadow sector in the economy, which is not calculated, therefore consider the approximate value. Also, there are also cases when the data of state and private counting services are diverged, and up to 3 times. What is the feature of the calculation of GDP? The essence is that the cost of products on the territorial distribution is calculated.
Which units consider?
To use data locally, it is calculated in national currency, and for data presentation in international format, as a rule, use the United States of America's dollars. In some cases, regional currencies can use regional negotiations or similar format.
Alternatives to gross domestic product
Gross domestic product is not the only parameter with which the welfare of the population of a certain country is assessed. Alternatively, GNP and ICR are used (gross national product and human development index). The difference between the national product in comparison with the inner product lies in the fact that incomes are considered not by territorially, but according to the national. That is, it is considered only how many were manufactured by representatives of a certain nation. The human development index is based not only on economic indicators, but also on a number of social, in which the possibility of implementing the person of its capabilities in society is regardless of origin.
There is another one, so to speak, an exotic method of assessing VNS - gross national happiness. A rather interesting parameter, which, despite its extraordinaryness, was still introduced in one country of the world - the Kingdom of Bhutan. The fact is that Buddhism adopted in the country as ideology, and the main goal of the state should be the overall happiness of all citizens, which is even enshrined in the country's constitution. A fairly interesting parameter, which may be able to see the future of the future.
Conclusion
I would like to give a few riding words: in order to be able to live in a well-developed country, to ensure a comfortable life to the country's population and each individual separately, it is necessary to increase the economic literacy of the population. If you read these lines, it remains only to be glad and advise to continue to engage in self-education. Here is the answer to the question of what GDP is and how it is measured.
