What is Gross Domestic Product?

Question

What is Gross Domestic Product?

1. A. The total value of goods and services manufactured in the country.
2. B. The total value of all the transactions in the country.
3. C. The reduction in the total value of goods and services produced in the country.
4. D. The monetary value of all finished goods and services made within a country during a specific period. (Correct answer)

Correct Answer

Option D — The monetary value of all finished goods and services made within a country during a specific period.

Detailed Solution & Explanation

The correct answer is The monetary value of all finished goods and services made within a country during a specific period..

Key Points

• GDP is the monetary value of all finished goods and services produced within a country's borders during a specific time period (usually a year or quarter), regardless of ownership.

Additional Information

• GDP counts final goods and services produced within a country's borders, whoever owns the factors. GNP counts output by a country's residents, wherever produced.
• The relationship: GNP = GDP + net factor income from abroad, and NDP = GDP − depreciation.
• Only final goods count; including intermediate goods would double-count. GDP also excludes transfer payments and second-hand sales.
• Nominal GDP is at current prices, real GDP at constant prices; their ratio is the GDP deflator. In India the base year is currently 2011-12, and estimates are published by the NSO.