GDP, GNP, NDP, NNP - 15 Mints Seminar Notes

GDP, GNP, NDP, NNP - 15 Mints Seminar Notes

Income is that the most often used term in social science. financial gain level is that the most great tool that is employed to work out the quality of living of the individuals in an exceedingly Country. Actual that means of value is value of all final merchandise and services created by the residents of a rustic. To calculate web national product, depreciation of plant and machinery utilized in the assembly method is subtracted.

National income is calculated for a specific amount, ordinarily a year (In India, year means that Gregorian calendar month one to March thirty one of next year). web issue financial gain from abroad is more to the domestic product to urge the worth of value.

National Income = C + I + G + (X – M)

Where,

C = Total consumption expenditure

I = Total investment expenditure

G = Total government expenditure

X – M = Export - Import

Different ideas of value

Gross Domestic Product (GDP)

Gross domestic product is that the price of all final merchandise and services created among the boundary of a nation throughout one year. In India one year means that from first Gregorian calendar month to thirty first March of consecutive year.

GDP calculation includes financial gain of foreigners in an exceedingly Country however excludes financial gain of these those that live outside of that country.

Net Domestic Product (NDP)

NDP is calculated by deducting the depreciation of plant and Machinery from GDP.

NDP = Gross Domestic Product - Depreciation

 

Gross National Product (GNP)

GNP is that the price of all final merchandise and services created by the residents of a rustic in an exceedingly year (i.e., first Gregorian calendar month to thirty first March of consecutive year in India).

While scheming value, financial gain of foreigners in an exceedingly country is excluded however financial gain of individuals UN agency live outside of that country is enclosed. the worth of value is calculated on the idea of GDP.

GNP = GDP + X - M

Where,

X = financial gain of the individuals of a rustic UN agency live outside of the Country

M = financial gain of the foreigners in an exceedingly country

Net National Product (NNP)

Net National Product (NNP) in Associate in Nursing economy is that the value once deducting the loss because of depreciation.

NNP = value - Depreciation

 

NNP at issue Cost:

It is the worth of NNP once the worth of products and services is taken at the assembly price.

NNP at Market Price:

It is the worth of NNP at client price.

NNP at market price = NNP at issue price + Indirect taxes – Subsidies Inflation

Inflation means that growth of cash or increase in offer of cash within the economy. Actual that means of inflation is increase in finances quicker than the expansion in real value.

In inflation finances will increase quicker than the demand of cash within the market, therefore cash loses its price because of oversupply of cash and this causes rise in value.

Reason behind Inflation

In developed countries, growth of cash offer is that the most vital reason of inflation. however in developing countries like India, financial reason is one among the explanations.

Some additional vital reasons are:

The most common reason of inflation altogether kinds of Economy is Deficit finance. the govt. of a rustic tries to grow the Economy of its country and spends additional for this cause. As a result the method finishes up acquisition deficit finance.

When public expenditure will increase however the availability of products doesn't then the inflationary value rises within the economy.

One of the explanations of inflation is quick growing population in an exceedingly country.

The large flow of foreign currency in an exceedingly country is additionally a vital reason of inflation. particularly once the flow is quicker than the absorption capability of the economy of a rustic then the inflationary downside arises.

When per capita financial gain will increase then demand of varied merchandise within the market additionally will increase and it additionally becomes one among the explanations of inflationary issues.

Presented by,

Bhuvanesh 

Banking Student

Magme School of Banking