economic
Economics Student Corner

Basic Concepts of Economics In Simple Language

Economics is a tough nut to crack for many – GDP, GNP, NDP, NNP, Repo, Reverse Repo, SLR, CLR, CRAR – there are many concepts to be understood. But if the concepts are properly understood economics is fun.

ClearIAS.com is trying to provide an overview of the basic concepts of Economics in a simple language for easy understanding. The main areas covered are – national income, monetary policy, fiscal policy, and balance of payments(BoP).

National Income

Under the broad topic of national income you may hear terms like GDP, GNP, NNP etc.

GDP: Gross Domestic Product (GDP) is the total money value of final goods and services produced in the economic territories of a country in a given year. Total value of goods and services produced in India for 2014-15 is projected to be around 100 lakh crore Indian rupees or around 2 trillion US dollars at current market prices. This is the value of Indian GDP when expressed at current market price.

GDP stands for total value of goods and services produced inside the territory of India irrespective of whom produced it – whether by Indians or foreigners.

GNP: Gross National Product (GNP) is the total value of goods and services produced by the people of a country in a given year. It is not territory specific. If we consider the GNP of India, it can be seen that GNP is lesser than GDP.

 

 

 

 

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *