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Monday, June 20, 2005

How is the GDP of a country calculated?

A common equation for GDP calculation is:
GDP = Consumption + Investment + Exports - Imports. Economists
have preferred to split the general consumption term into two
parts: private consumption and public sector spending. Therefore,
the standard GDP formula is expressed as
GDP = Private Consumption + Government + Investment + Net Exports
 (or simply GDP = C + I + G + NX) where C is private consumption
or consumer expenditure, I is business investments, G is
government expenditure, NX is gross exports - gross imports.
 For calculation of GDP, net interest expenses in financial
sector are added to GDP.

tatha
source: times of india
 

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