Gross domestic product (GDP) refers to the final outcome of the production activities of all resident units of a country (or region) in a certain period calculated according to the national market price, and is often recognized as the best indicator to measure the national economic situation. GDP is an important comprehensive statistical indicator in the accounting system, and also a core indicator in the new national economic accounting system of China. It reflects the economic strength and market size of a country (or region).
GDP is the final outcome of the production activities of all permanent residents in a country (or region) in a certain period of time, calculated at market prices. GDP has three forms of expression, namely, value form, income form and product form. From the perspective of value form, it is the difference between the value of all goods and services produced by all permanent units in a certain period and the value of all non fixed assets goods and services invested in the same period, that is, the sum of the added values of all permanent units; From the perspective of income pattern, it is the sum of the first incomes created and distributed by all permanent units to permanent units and non permanent units within a certain period of time; From the perspective of product form, it is the value of goods and services produced by all permanent residents in a certain period of time minus the import value of goods and services. In actual accounting, there are three methods for calculating GDP, namely, production method, income method and expenditure method. The three methods reflect GDP and its composition from different aspects, and the theoretical calculation results are the same.
First, GDP is measured by the final products and services, that is, the final sales value of the final products and services in the period. Generally, products can be divided into intermediate products and final products according to their actual use.
One form of final product: various commodities
The so-called final products refer to the goods and services produced within a certain period of time that can be directly consumed or used by people. These products have reached the final stage of production and can no longer be used as raw materials or semi-finished products in the production process of other products and services, such as consumer goods, capital goods, etc., which are generally sold in the final consumer goods market. Intermediate products refer to goods and services, such as raw materials and fuels, that are used for reprocessing or resale for production of other products. GDP must be calculated according to the final product of the current period, and intermediate products cannot be included, otherwise double calculation will be caused.
Second, GDP is a concept of market value. The market value of various final products is the exchange value reached in the market, which is measured by currency and reflected through market exchange. The market value of a product is obtained by multiplying the unit price of the final product by its output.
Third, GDP generally only refers to the value caused by market activities. Those unproductive activities, underground transactions and black market transactions are not included in GDP, such as domestic work, self-sufficient production, gambling and illegal drug trade.
Fourth, GDP is the value of the final product produced in the calculation period, so it is the flow rather than the stock.
Fifth, GDP is not real wealth in circulation, it just uses the standard monetary average to express the amount of wealth. However, it is uncertain whether the products can be completely transformed into circulating wealth.
(Editor in charge: Zang Mengya)
