GDP

Gross Domestic Product

Fullform of GDP

Net GDP

• The total value of all goods and services produced in a country

• Minus the value of depreciation

• A bakery earns $1000 in a day but spends $100 in fixing old ovens, just for the sake of the argument we can say the _______ of the bakery is $900

GDP per capita

• Average GDP per person in a country

• Calculated by the dividing the total GDP by the no. of people.

• Doesn’t subtract depreciation

• Instead indicates us how rich or productive each person would be on average.

Value of Depreciation

The amount by which machines/buildings and other capital goods lose their usefulness or value over time due to wear, aging, or obsolescence.

Productivity

• How efficiently goods and services are produced using available resources

• The available resources can be labor or/and capital

• Amount of output (like products or income)

• created per unit of input (like one worker or one hour of work)

Capital

• Machines/Buildings/Tools/Infrastructure

• Used to make goods and services

• More of this often increases productivity

Labor force

• Total no. of people who can work

• Worker’s skills/training

Human Capital

• Education and skills

• Experience gained by workers

Technology

Methods and tools that improve how goods and services are made

Natural Resources

• Lands

• Minerals

• Forests

• Water

• Anything natural that help create goods

Investment

Spending money to build factories, buy machines, or improving education and research

Government Policies

Rules and taxes made by the government that influence how businesses and people spend or produce.

Trade (Exports and Imports)

Buying and selling goods across countries.

Population growth

The rate at which the number of people in a country increases.

Political Stability

How peaceful and predictable a country’s government is.

Infrastructure

Basic systems like roads, highways, power, internet, and ports, that support economic activity.

Savings Rate

The portion of income people or businesses save instead of spending.

Consumer spending

The amount people spend on goods and services.

Innovation

Creating new ideas, products or way of doing things.