For those who follow economic news, the abbreviation is familiar, and the question of what GDP is is not before such people. For those who do not know its decoding, we can only advise correcting this misunderstanding, because GDP shows the overall well-being of the country. In order for this indicator to further improve, the economic literacy of the population must increase, because the greater its value, the more money is in the state, and the more potential needs can be met. Here the additional question arises of distributing money so that the maximum number of needs are met, but this is a separate case. So, let's move on to answering the question of what GDP is and how it is measured.

How does GDP stand for and what does it mean?

The decoding is very simple - gross domestic product. In other words, everything that was produced on the territory of a certain country. It is used to count material goods that were produced by residents of the country for the purpose of subsequent sale both within the country and abroad. The cost of all products ready for sale is taken into account. So, if semi-finished products are manufactured at one enterprise for subsequent use in this same enterprise to create the final product, then the cost of the finished products is not counted in the gross domestic product, but only the cost of the final product. It’s easy to remember this short definition so that, if necessary, you can answer the question of what GDP is.

Why is GDP calculated, and who does it?

They calculate the gross domestic product in order to know the approximate economic situation in the country, and also so that the government can, based on real economic power, plan future development. When calculating, everyone needs to remember that real GDP is equal to the value of all produced and ready-to-eat products that are sold or could potentially be sold to various individuals or legal entities. Conventionally, everyone who calculates GDP can be divided into 2 types: public and private branches.

The government is represented by the Statistics Committee and various services whose responsibilities include collecting statistical data (tax service, etc.). On the private side, there are various banks that calculate their own data based on open sources of information. Unfortunately, it is not possible to calculate the exact GDP due to the presence of the shadow sector in the economy, which is not calculated, so an approximate value is calculated. It is also not uncommon for data from public and private counting services to differ by up to 3 times. What is special about calculating GDP? The point is that the cost of products is calculated according to territorial distribution.

In what units are they counted?

To use local data, the calculation is done in local currency, and to present data internationally, United States dollars are typically used. In some cases, during regional negotiations or a similar format of an organized meeting, regional currencies may be used.

Alternatives to Gross Domestic Product

Gross domestic product is not the only parameter by which the well-being of the population of a certain country is assessed. Alternatively, GNP and HDI (gross national product and human development index) are used. The difference between the national product and the domestic product is that it calculates income not on a territorial basis, but on a national basis. That is, only how much was produced by representatives of a certain nation is counted. The Human Development Index is based not only on economic indicators, but also on a number of social indicators, which consider the possibility of a person realizing his or her potential in society, regardless of origin.

There is another, so to speak, exotic method for assessing the GN – gross national happiness. Quite an interesting parameter, which, despite its unusualness, was nevertheless introduced in one country in the world - the kingdom of Bhutan. The fact is that Buddhism has been adopted as an ideology in the country, and the main goal of the state should be the common happiness of all citizens, which is even enshrined in the country’s constitution. Quite an interesting parameter that, perhaps, can be seen in the society of the future.

Conclusion

Finally, I would like to give a few parting words: in order to be able to live in a well-developed country, to ensure a comfortable life for the country’s population and for each individual individually, it is necessary to increase the economic literacy of the population. If you are reading these lines, then you can only rejoice and advise you to continue to educate yourself. Here is the answer to the question of what GDP is and how it is measured.

GDP, gross domestic product, is the total amount of services and goods produced in a country over a given amount of time.

This is the most important indicator of the economy of any country, allowing one to assess the level of development of industry, production, agriculture of the country, and the level of well-being of its inhabitants.

Usually the annual GDP of a state is assessed, but sometimes, if an intermediate assessment is required, smaller periods can be used - a month, a quarter, a half-year.

What is GDP: in simple words

GDP, gross domestic product, is the most important indicator of the state of a country's economy. If GDP grows steadily, it means that the state’s economy is developing: new industries and enterprises appear, and those that are already operating increase the number of goods produced.

Growing GDP means that every year the population of the state receives more and more opportunities to work, earn money, and satisfy their needs. A decrease in GDP signals that the closest attention should be paid to the country’s economy and production sector, since, most likely, we are talking about a fall in production, a reduction in jobs, and personal incomes.

GDP per capita

GDP per capita is calculated using division general meaning GDP per number of people living in the country.

Calculations can be carried out taking into account the entire population or according to certain standards, for example, taking into account only adults. An “adult equivalent” scheme may be used, where different weights are applied when converting children into adult equivalents (the younger the child, the lower their equivalent weight).

Russia's GDP

The Russian economy today ranks fifth in the world ranking in terms of GDP (according to World Bank data). In 2014, Russia's GDP amounted to $3,745 billion.

In terms of nominal GDP for 2014, Russia ranks ninth or tenth (depending on the current dollar exchange rate): the value of nominal GDP last year amounted to $1,861 billion.

If we talk about GDP per capita, the situation here is less joyful: Russia ranks only 44th in the world in terms of this indicator.

According to data obtained for 2014, the share of the Russian economy in the world is 3.3%.

GDP ratio

There are two types of GDP indicator:

1. Nominal. Calculations are carried out in prices of the current period.
2. Real. The calculations take into account the prices of the comparable previous period (usually a year).

Calculating real GDP allows us to eliminate the impact of rising prices on the indicator, determining the growth of the state’s economy. The ratio of nominal to real GDP also makes it possible to assess the state of the economy and the rapidity of price growth.

Components of GDP

The GDP of any state consists of goods that are tangible and intangible (services). The calculation takes into account services and goods produced only in this country in one year. This includes the total cost of leather sofas and cars produced, the cost of baked goods and patients treated in hospitals, the cost of repairs in cottages and children's overalls, in general, the cost of everything that was produced during the designated period in the country.

Calculating GDP is a complex process that economists do using special techniques. If you need to calculate GDP per capita, the resulting figure is divided by the number of residents of the state.

Difficulty of the article Prepare for the Unified State Exam Learn more than at school Win the Olympiad

GNP and GNP

Gross National Product - This is the market value of the entire volume of goods and services created by producers of a given country in one year, both within their own country and in other countries.

Gross domestic product - This is the cost of all final consumption goods and services created in the country during the year, valued at market prices.

Included in GDP:

GDP includes only final goods intended directly for consumption, i.e., it excludes all intermediate goods used to produce final goods. Therefore, for example, GDP does not include the cost of grain, flour, yeast, which are necessary to obtain the final goods of bakery production. Otherwise, the cost of intermediate goods would be counted twice, since it is included in the cost of the final product.

Economic growth does not mean that real gross domestic product must necessarily increase every year; cyclical declines are acceptable, but in general the direction of the economy must be upward. To obtain a real result, GDP growth must be measured regardless of possible price increases, because with high inflation, prices can rise significantly, and production, on the contrary, can decrease. Therefore, in order to know how much the real production of goods and services has increased, the growth can be calculated in so-called constant prices.

Economic growth → economic and social progress. It means the growth of surplus product in the country → growth of profit - a source of further expansion and renewal of production and an increase in the well-being of the population.

Expand

QUESTIONS:

Expand

1. Establish a correspondence between the types of economic growth and their specific examples illustrating them: for each position given in the first column, select the corresponding position in the second column. Write down the resulting sequence of numbers.

Jacob Marshak (1898−1977) - American economist.

He studied at the Kiev Commercial School, then at the Technological Institute. Member of the Menshevik Party. Minister of Labor of the Turkic Soviet Republic. He graduated from the University of Heidelberg (1919), worked at the University of Berlin and the Kiel Institute of World Economics. He defended his doctoral dissertation at Oxford (1935). Worked at universities in New York, Chicago, Los Angeles. President of the American Economic Association (1977).

Early works are in the nature of Marxist socio-economic analysis.

He studied the economic behavior of the subject. He worked with statistical hypotheses and was interested in the issue of assessing information. Made a significant contribution to the development of econometrics. Developed a theory of decision making under conditions of risk and uncertainty.

Main works: “Economic Science and Information System” (1971), “Economic Information, Decision and Forecast” (1974), “Assets, Prices and Monetary Theory” (with Helen Makover, 1938).

It is quite difficult for an ordinary person without an economic education to understand what GDP is. In economics, this indicator plays a very important role. important role. Based on it, one can assess the level of economic development of the state and its competitiveness in the international market.

Gross domestic product (GDP) is the totality of all goods (goods and services) produced by residents in a particular country during the year, expressed in prices of the final product.

Simply put, gross domestic product is the total quantity of all goods and services produced by all enterprises and organizations of the country during a certain reporting period (most often the calendar year is estimated).

in economics?

This indicator is very important when assessing the efficiency of the country’s economy. Gross domestic product characterizes the growth rate and level of its development. Often, the GDP indicator is used to assess the standard of living of the population of a state. The higher this indicator, the higher the standard of living is considered (there is indeed a connection between the indicators, but other, more specific economic indicators should also be used).

Nominal and real gross domestic product

The GDP indicator can be of two types:

1. Nominal (calculated in prices of the current period).
2. Real (calculated in prices of the comparable previous period). Most often, prices from the previous year are used for comparison.

The calculation allows us to neutralize the impact of price increases on this indicator and determine the net growth of the state’s economy.

Most often, the GDP indicator is calculated in national currency, however, if there is a need to compare the corresponding values different countries, it is allowed to convert it into another currency at the appropriate exchange rates. Global GDP growth is as follows (2013).

Income (distribution) method of calculating GDP

What is GDP in economics? This is, firstly, an indicator based on an assessment of the profitability of the owners. The calculation is carried out by summing them up. At the same time, the amount of GDP includes the following components:

• W - total amount paid wages all employees of the country (both residents and non-residents);
• Q - amount of deductions for social insurance population;
• R - profit (gross);
• P - mixed income (gross);
• T - taxes (import and production).

Thus, the calculation formula looks like: GDP = W + Q + R + P + T

Consumable (production) method

The country's population, in the course of their labor activity, produces different types and forms of the final product (meaning specific goods or services that have a certain value). It is the total expenditure of the population on the purchase of final products of labor activity that will constitute the gross domestic product. When calculating GDP using the production method, the following indicators are summed up:

• C - expenditures of the country's population for consumer needs;
• Ig - private investment injections into the country's economy (gross);
• G - government procurement (purchase of goods and services by the state)
• NX - net exports (the difference between government exports and imports).

GDP is calculated using the formula: GDP = C + Ig + G + NX

Calculation based on added value

The Institute of Economics allows the calculation of the amount of GDP using value added. This technique allows you to obtain the most accurate GDP indicator, since it discards intermediate products that could mistakenly be counted as final products in the previously discussed methods. That is, the use of value added calculation eliminates the possibility of double counting. By summing up the indicators of all goods and services in a country, GDP can be reliably calculated. This is because value added is the market value of the product minus the cost of materials and raw materials purchased from suppliers.

GDP per capita

One of the most significant and indicative indicators of the level of development of the state’s economy. It is determined by dividing the overall GDP indicator by the number of residents of the country and shows how many products were produced over a certain period on average for each resident of the state. This indicator is also called “per capita income”.

Also a frequently used indicator of economic development is one that summarizes the final product produced both within the country and abroad. The main condition is that the manufacturer of the products are residents of a given state.

We have already studied what GDP is in the economy and its role in the analysis of ongoing changes. So what are the real GDP indicators of the countries of the world today?

Rating of countries by nominal GDP

This rating was compiled based on nominal GDP converted into dollars at the market (or established by the authorities) exchange rate. The world economy is structured in such a way that this indicator is somewhat underestimated in developing countries, and overestimated in developed countries. This is due to the fact that the difference in the cost of similar products in different countries is not taken into account.

So, the top ten, according to the IMF for 2013, looks like this:

Country ranking by per capita

The level of GDP per capita is indicative, but not the most accurate indicator characterizing the economy, since it does not take into account the specifics of sectoral development of the economy, the costs of production, its quality, as well as other equally important elements of the economic system.

The list of 10 countries with the highest level of GDP per capita, according to the IMF for 2013, looks like this:

The problem of slowing economic growth in Russia

Global crisis processes, as well as a number of subjective economic factors, caused the Russian economy to weaken somewhat in 2013-2014. GDP, accordingly, grew at an extremely low rate. So, according to Alexey Ulyukaev, who holds the position of Minister of Economic Development Russian Federation, 2013 was the worst year for the Russian economy since the crisis year of 2008. During this period it did not increase at the same pace as expected. Thus, the expected GDP growth rate was reduced by the department from 3.6% at the beginning of the period to 2.4% in June and, finally, 1.4% in December.

The situation in industry also remained deplorable. While the mining sector still showed a slight increase, the manufacturing sector even showed some decline. Inflation also reached 0.5% higher than expected.

Causes of crisis phenomena in the Russian economy

Thus, one can see signs of stagnation in the Russian economy. There are objective reasons for this, which can be divided into 2 groups: internal and external.

Internal factors

External factors

1. Common in Europe. The development of the world economy is cyclical and is accompanied by recessions and upswings.
2. Decline in exports (both in value and physical dimension). Caused by both the European economic recession and the exhaustion of the raw materials model for the development of the national economy.

Thus, to overcome the crisis in the economy, it is necessary to reorient industry, improve the investment climate, and also hope for an improvement in general trends in the world economy.

GDP is the “wallet” of the state

The initial letters of the expression “Gross Domestic Product” (what did you think?)
Gross domestic product is one of the most important economic indicators of a country's economic activity. It indicates the market value of all goods and services produced in the country during the year for the purpose of consumption, export and accumulation, with the exception of the cost of intermediate goods and services, that is, raw materials, fuel, energy, feed and others.

This is done to avoid double billing. For example, the cost of a car includes the cost of the iron from which steel is made; steel from which rolled products are produced; rolled metal from which the car is made.

GDP - (decoding - Gross Domestic Product) is the most complete indicator of social welfare. It gives an idea of ​​the overall material well-being of a nation, since the higher the level of production, the higher the welfare of the country.

Gross domestic product is determined by money, because only money serves as a measure of the cost of goods and services; only with the help of this universal equivalent can wheat and washing machines, books and tractors, Cell phones and the services of shoemakers and doctors.

There is nominal and real GDP. The first is expressed in current prices of a given year. The second is in prices of the previous or any other base year. Real GDP takes into account the extent to which GDP growth is driven by real output growth rather than price increases.

Gross domestic product is expressed in national currency, but for the convenience of international relations, GDP is calculated in US dollars. Comparability of indicators is ensured by a unified methodology for determining GDP, developed by the UN Statistical Service and adopted in most countries of the world.

The history of the emergence of calculations of Gross Domestic Product

The first attempt to measure the economic activity of the state was made by former Russian citizen and then American economist Simon Kuznets (Shimon Abramovich Kuznets). His first calculations appeared in 1934. In 1937, he presented to the US Congress calculations of indicators of US economic activity for 1929 - 1935. In 1971, for his scientific exploits, S. Kuznets was awarded the Nobel Prize in Economics

Leaders in terms of GDP for 2012 (in millions of dollars)

• USA - 72,440,449
• China - 16,244,600
• Japan - 8,223,103
• Germany - 5,959,718
• France - 2,612,878
• UK - 2,471,784
• Brazil - 2,252,616
• Russia - 2,014,775
• Italy - 2,014,670
• India - 1,841,717

In 2013, GDP growth in Russia was 1.3%

Video