2.  Gross domestic product (GDP) is
the market value of all officially recognized
final goods and services produced within a
country in a given period of time.
 GDP per capita is often considered an
indicator of a country‘s standard of living.
Eg: If we say GDP is up by 3% last year, it
means economy has grown by 3%.
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3.  Is a major economic activity indicator
 Represents business activity
 Economists rely on this data to determine
growth or decline of economy
 Helps investors to know where to
invest/allocate the money
 Unemployment is an indicator of shrinking
GDP
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4.  Ifthe economy appears to be growing too
fast and GDP has shown a pattern of
steadily rising, policymakers might
evaluate whether a change needs to be
made to interest rates in order to keep
inflation under control.
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5.  Product Approach
- Market value of all final goods and services calculated
during 1 year
 Income approach
- Sum total of incomes of individuals living in a country
during 1 year
 Expenditure Approach
- All expenditure incurred by individuals during 1 year
 All the above approaches should have the same result
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6.  Gross national product (GNP) is the market
value of all the products and services produced in
one year by labour and property supplied by the
residents of a country.
 Basically, GNP is the total value of all final goods
and services produced within a nation in a
particular year, plus income earned by its citizens
(including income of those located abroad), minus
income of non-residents located in that country.
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7.  It indicates the economic condition of the country.
 Helps compare own country’s economic condition with
other countries
 Study of GNP guides us to make policies for
saving,investment and consumption
 Gives information on distribution of wealth.
 Gives information about the contribution of various
sectors of the economy eg:agriculture,industrial
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8.  Throws light on source of employment
 Tells about rate of economic growth
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