Question

n for 21 Discussions > Discussion for Chapter 21 This is a graded discussion: 7 points possible due Discussion for Chapter 21 One of the most important economic indicators is GDP. This is discussed briefly in the text but because of its importance we need to take a closer look at this valuable concept. For this discussion research the various aspects of the economy that comprise the GDP, choose two, and explain how you think the changels) in these aspects of GDP over the past five years has impacted or been involved in our current economic situation. This will require outside research so be sure to cite your sources. Subscribe Unread D es Reply

Answer 1

GDP is formulated as sum of priavte consumption, gross investment, government investment and Exports minus the Impirts.

GDP = C+I+G+ (X-M)

Now if we compare the GDP of India which has been significantly growing from aroujd 5.5% in 2014 to 7.8% by 2019 as worlds fastest growing economy, the two biggest reasons are the Government spending and Increasing private consumption .

Private consumption has drastically increased in India due to high availability and scalability in agriculture production as well as rising incomes coupled with moderate inflation in CPI and WPI terms. The contractionary monetary policy by Central Bank of India or RBI has made inflation reach down to 3-4% rnage and hence private consumption has increased which causes GDP to Increase.

The government spending has increased with various projects like Make In India, Skill India, Digital India which have boosted rural income and employment opportunities which comprise 70% of total population and age. Thus GDP tends to increase naturally .