Gross Domestic Product was a theory that was introduced for the President of Roosevelt before the 1930’s as a measurement for the whole economy. But it wasn’t until World War 2 that the GDP became an important measure for Britain to see how well it could to in the war. Initially, the GDP was being used as an emergency tool for measurement of wealth of the economy. Today it has become the key tool to measure and compare growth of economies in the world.
GDP measures the value of economic activity within a country. More precisely, GDP is the sum of the prices of all final goods and services produced in the country during a period of time, normally a year. It measures the legal activities carried out by firms/ individuals and places a monetary value on their work. GDP which was originally GNP- Gross National Product, was used by the creator Simon Kuznets as well was John Maynard Keynes as a tool to help with decisions policy making and planning for war. GDP= C+I+G+(X-M). This formula has now...
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