MONEY MATTERS

What is GDP? How to measure the GDP? Many people will have these questions in their minds. GDP is the acronym of gross domestic product . GDP is the value that has been determined in market for a country’s product and service that it offers. By knowing the GDP of a country we can determine the standards of living of the people. But some may argue it’s not an accurate way of measuring the standards of living of the people. But somehow we can judge the standards of living. There are many ways of calculating GDP. The best way of calculating GDP is based on measuring the output produced by a country. Here output means the products and services that are produce by a country. There is another one term which is similar to GDP. It is GNI. Gross national income is the abbreviation of GNI. The GDP defines the product produced within a country. On the other hand GNI is defined as the amount of product produced by the citizens of the country. Let’s say there are n numbers of companies in country. Let’s say they produce x amount of product. GDP is the measure of x amount of product produced in country. But within the n number companies there would be few foreign companies who have invested in that country. In that case let’s say there m number of foreign companies that are invested. Then GNI is the measure of products produced by n-m number companies.

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