Gross Domestic Product (GDP):
Gross Domestic Product or GDP define the total amount of production of goods
and services within the given period of time.
There are two types of GDP. This are-
(i) Nominal
GDP
(ii) Real
GDP
(i) Nominal GDP: We
can measure the GDP for a particular year using the actual market prices of
that year. This gives us the nominal GDP by multiplying the quantities of good
by a fixed set of prices.
(ii)
Real GDP: Real GDP is the index of the volume or quantity of
goods and services produce. We measure real GDP by multiplying the quantities
of good by a fixed set of prices.
Nominal GDP is calculated by using the changing
market price; on the other hand, real GDP is calculated by using the constant
price.
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