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SEMESTER SPRING 2017
Money and Banking (MGT411)
GDB No. 1 (5 Marks)
Gross Domestic Product (GDP)
The objective of this question is to enable the students to understand the concept of gross domestic product (GDP), nominal GDP and real GDP with reference to production of goods and services and economic well-being of the people.
Financial development is measured by the commonly used ratio, broadly defined money to GDP and Economic development is measured by the real GDP per capita. The gross domestic product (GDP) is an instrument to depict the health of a country’s economy. It represents the total value (in Rs.) of goods and services produced over a specific time period.
Suppose, if the same number of goods and services are produced in a country over the years then what will be the impact of this production on nominal and real GDP. Will nominal and real GDPs increase? If ‘YES’ then on which grounds? If ‘NO’ then why? Elaborate your answer with strong logical arguments by explaining the concept with reference to economic well-being of the people.
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