Q. What is GDP?
Solution:
Gross Domestic Product (GDP) is a measure of the total value of all goods and services produced in a country during a specific period, usually a year. GDP is one of the most commonly used indicators of a country’s economic performance.
When GDP goes up, it usually means the economy is doing well and people are making and spending more money.
If GDP goes down, the economy might be struggling. It’s a key number used to compare the economic performance of different countries.
Example
Imagine a small country produces in one year.
10,000 apples, sold for $1 each
5,000 shirts, sold for $10 each
1,000 bikes, sold for $100 each
To find a small country’s GDP, you add up the value of all these goods and services produced in a year:
Apples: 10,000 x $1 = $10,000
Shirts: 5,000 x $10 = $50,000
Bikes: 1,000 x $100 = $100,000
So, small country’s GDP for the year is $10,000 + $50,000 + $100,000 = $160,000.
This $160,000 represents the total value of everything produced in Economica that year.
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