How to calculate the GDP - Overview

Educational insights
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Term: Gross Domestic Product (GDP)

  • Definition: Measures total economic output, and indicates economic health over time.

  • Calculation: GDP=C+i+G+(X−M)

    • C: Consumption
    • i: Investment
    • G: Government spending
    • X: Exports
    • M: Imports

  • Example: If a country has RS.1 trillion in consumption, RS. 200 billion in investment, RS.300 billion in government spending, RS.500 billion in exports, and RS.400 billion in imports, the GDP would be calculated as: GDP= RS. 1 trillion+RS.200 billion+RS.300 billion+(RS.500 billion−RS.400 billion)=RS.1.6 trillion GDP=RS.1 trillion+RS.200 billion+RS.300 billion+(RS.500 billion−RS.400 billion)=RS.1.6 trillion