What is GDP?
GDP in a very simple way is the total value of everything produced in a country. When we talk about the “size” of the economy, we actually talking about GDP.
How GDP Calculated?
GDP is calculated on the final product, For example, “Leather Jackets” made in Pakistan, when we calculate GDP, we will not count the value of individual parts that are used in ” leather jacket” i.e leather, thread, button, and other accessories for making “Leather Jacket”.Only the final value of the Jacket will be count.
Economists believed that around 2% is ideal for sustainable economic growth. Rates that are faster than that can lead to inflation and asset bubbles, both of which can contribute to economic downturns.
What is real GDP?
The REAL GDP is calculated by removing the effects of inflation, Real GDP helps the economist to compare the figures, otherwise, the economy might be seen as growing when it’s actually suffering from inflation.
GDP Growth Rate
GDP growth rate is the percentage increase in GDP. A change in GDP growth rate indicates the economy moves through the business cycle. The negative growth rate indicates that the economy is contracting for that years, that’s depression. in the same way, if the growth rate is too high, it creates inflation.
