What is GDP?

We all once heard that there is such a thing as GDP, and it is very important for the country. And some even remember how V. Putin, in the prime of his presidential career, "threatened" to increase the GDP figure twice as much over a ten-year period. Well, let's face it, he got excited. However, many of us do not even know about GDP at all.

This abbreviation means "gross domestic product". In simple terms, GDP is the total amount of all goods and services that were produced in a particular period (year or quarter) for domestic consumption, as well as for accumulation and export. In this case, the gross product is expressed in the price equivalent. To correctly and with minimum errors calculate the level of GDP, it takes several of its types. The resulting data is then compared, and a relatively accurate result is output.

To understand what GDP is and calculate its size, it is necessary to separately determine the absolute GDP (which is calculated at the prices of the reporting period), then separately calculate the real GDP (last year's prices without inflation). These indicators are compared and get a picture of the development of the country's economy and increase or decrease in GDP for the year. If you make simple calculations and the total value of GDP divided by the number of population in the state, you can get the size of the indicator, which falls on every Russian citizen. And if you make such a calculation for another country, you can easily compare the level of development of the two states. To put it more simply, you can answer the question about what GDP is, as follows. This is the sum of all that consumes the people, government spending, exports, investment, minus imports.

That is, we consume goods and use services and pay money for it. In turn, the state also spends money, only budgetary, for nation-wide needs. And investors invest their financial savings and savings in the development of business. However, there is one more important link in this system: the balance between import and export of products in the country. It is called trading, and it happens that it contains negative indicators. This is the case if a country purchases more goods on the foreign market than it sells. Because of this, its GDP is declining.

There is another formula for calculation, which answers the question of what GDP is, in terms of income. So, based on their above, we get that the figure is made up of the incomes of owners and personal incomes. In fact, these two different formulations are generalized by one concept - money. Simply in one case the earned means are considered, and in the other - the spent, however, the sum in both cases is the same.

In addition, there are such concepts as nominal and real GDP. What is the difference? The first is calculated based on the prices of the current year, whereas the real one is expressed in base year prices, which may be 1999, and 2000, and even 2014. Indicators of both types of GDP are calculated in the appropriate units: rubles, US dollars or euro.

Many countries are trying to raise the level of GDP. As for Russia, this indicator is often raised not at the expense of the level of production of goods, since this indicator is standard lagging behind the value of manufactured goods in the Soviet era. At the same time, one can say with certainty that the president's promises were empty, as for a qualitative increase in GDP it is necessary that the economy grow by 7-8% annually, and for this it is necessary to invest in it large sums of money that our country does not yet have and In the near future is not expected.