Gross domestic product is the main indicator of the economic development of the state

The level of development of the country and its stable position are determined on the basis of a number of economic indicators. These indices enable us to determine the pace of development not only of the entire state, but also of individual sectors. The indisputable leader among such indicators is the gross domestic product. This is the most accurate economic formulation, which is adopted to calculate the market value of the quantity of products produced and services provided within the country. In this case, a specific time interval is used to determine this value. Most often, the main criterion is the calendar year.

Indicator composition

Do not forget that the gross domestic product is the cost calculation of all those goods and services that have already passed all the stages of their production and have a final form, that is, they can be called "final goods". The calculation takes the volume of output within the territory of one country. At the same time, goods produced by citizens of the state and persons located in its territory under special permits are subject to summation. That is, in other words, if any factory, plant or any other enterprise is in the possession of a foreign person or has foreign investment, all the products of this organization are still in the calculation of the described indicator.

The subtleties of the calculus

When determining the value of this index, you may encounter some problems. For example, double calculus. Let's say that the plant "N" produces accessories to the tractors and delivers them to the plant "M", which these same tractors and descend from the conveyor. In this case, all the spare parts produced by the first organization are taken into account only in its annual balance sheet, and not otherwise.

The gross domestic product is the total cost of all the works and services rendered. Various social services, service stations and the rest of the institutions included in this category are also required to count this indicator. At the same time, gross domestic product calculation is a multivariate technology that can be implemented by various methods in order to obtain different indices.

Index calculation

The basis of the basis for calculating this indicator is the price. It should be noted that, depending on whether it is valid or the value taken over the previous period, the desired index will be called differently. Nominal gross domestic product lays in its calculation the so-called "current" at the moment (real) prices.

The formula for this expression is as follows:

• Value of GDP = total GDP of the country x current price.

Initially, the indicator is calculated for each organization, firm, enterprise, etc. Then the data falls into a single register and is summarized.

If in the above equation the last term is replaced by the price of the base year, then the gross domestic product received is already real GDP.

The differential between the price values of the current and previous year displays the price index. Using the value of this indicator, you can get information about the increase or decrease in the growth rates of the country's economic welfare.

This index determines the standard of living of the population. So, if we divide the value of the gross domestic product by the number of residents and non-residents of the country, we obtain an indicator characterizing the GDP per capita output . This index is the most significant in determining the position of the state in the ranking of the welfare of world countries.