part 2 Important economy Questions and answers on GDP by Md kashif hayat

1 Define GDP 

Ans = It is the market value of all final goods and services produced within a financial year by factors of production located within a country, or simply total market values of country output. 

2 How can GDP be estimated? 

Ans = GDP can be estimated at both factor cost and market price. 

3 What is factor cost? 

Ans= It is the price of commodity from producer side. 

4 What is market price? 

Ans = When indirect taxes imposed on commodity it is called market price. 

5 Define the formula of factor cost? 

Ans = FACTOR COST = MARKET COST + SUBSIDIES - INDIRECT TAXES 

6 define the formula for Market cost? 

Ans = FACTOR COST - SUBSIDIES + INDIRECT TAXES 

7 Define the formula for GDP? 

Ans = GDP = C ( consumption expenditure of households)  + GI ( gross investment by firms)  + G ( Government expenditure)  + ( X-M)  ( Value of exports - value of imports) 

or GDP=C+GI+G+(X-M) 

© Md kashif hayat 

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