GDP is measured by the overall production coming out of that country, which we also call Goods and Services for that particular timeframe basically for a year. We know on what things GDP is measured, but do we know that GDP is not calculated for all things, such as if there is some work for which a person is not taking money, such as a householder. There are some places where income cannot be tracked, such as black money which is generated from some such work that there is a ban on doing it.

Effect of GDP on Country

  • What if GDP goes up?

  1. The GDP is a figure which shows that how is the condition of the country, how strong is the economy of that country, if that figure keeps increasing.

  2. Then we can say that the economy of that country is getting stronger.

  3. Along with that the company starts getting more work, which proves that the employability is also going to increase, and many people will get jobs.

  4. It means money came to the people, means money came to the country and its impact would be on inflation, inflation would be reduced, this would do another good thing that people would have an increase in their savings.

  • What if GDP goes down?

  1. Going down in the GDP figures, it is clearly visible that the economic system of the country is not good.

  2. This proves that money is not coming in the country, even the industrial sector does not show growth, due to which another bad thing is done that the unemployment also increases.

  3. And if the country does not even have money, then it means that inflation will increase, which can take the country even further down due to employability.

Use this formula for GDP calculation


And there is a term which we call GNP, which is also a very important indicator to know the economic condition of any country.

The full form of GNP is Gross National Product.

This question must have come in everyone's mind that what can change by changing one word, it is not like that. As we know, the measure of GDP which is the total of the final products and services made in the country’s border for the specific time, similarly GNP is such an index in which only the income of the residents of the country is considered, whether that person lives in the country or not.

But as said, GNP is just an indicator, but more and more GDP is used to compare the economic development of the country from country to country.

How is GNP calculated?


Do all the products produced in the country work, some fail, now those defective products also have some cost, whose cost is called depreciation cost. All these products would be measured in GDP, but if we remove them and separate their cost from GDP, then what we get is called Net Domestic Product (NDP).

How is NDP calculated?


If we reduce the depreciation cost, which means the amount of failed product in the Gross National Product, then what we will get can be called Net National Product (NNP)

How is NNP calculated?


History Of GDP

After the First World War, everyone would know that there was a great recession, all the countries were struggling with this economic recession, and so many people had also died, so there were less workers to work, it took almost ten years to emerge from this economic recession. Some countries had economic development and some countries did not, but no one could tell because people did not have any means how to tell which country's economic development has taken place.

How to know now? Everyone was thinking about it, so a word came which was GDP was given by an economic scientist named Simon living in America in the year 1933. And he told that with the help of GDP, any person can find out the economic development of his country. World Bank was established in 1945 and IMF an international monitory fund came which supported GDP, after that all the countries became aware of GDP and they also started using it and then Economic Development is being detected properly.

Types OF GDP
  • Agricultural GDP

  • Industrial GDP

  • Services GDP

  • The base year on which the CSO (Central Statistical Office) keeps the prices and the total value that comes out of that value when combined with production is called Real GDP.

    The value which is affected by inflation and on the basis of that the GDP is derived, it is called Nominal GDP.