What Is GDP?

byTulika Prashant

GDP is like a country’s report card. Let’s take an example: think of a country where only four kinds of professions exist—a farmer, a schoolteacher, a shoemaker and a computer engineer. At the end of the year, they’ve all done something useful—grown grains, taught lessons, made shoes or developed software. Now, when we add up the value of everything they produced or did in a year, we get the gross domestic product, or GDP, of that country.

So, what does GDP include?GDP adds up the value of two main things: Goods: Physical items like grains, milk, pencils or airplanes. Services: Things people do for others, like delivering groceries or running a school. For example, if a biscuit factory like Parle in India bakes and sells crores of