Gross Domestic Product Refers to the Total Term Paper

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Gross Domestic Product refers to the total worth of final goods and services produced within the nation in a given year. GDP accounts for the income generated as per the location it is earned instead of the owner of the factor of production. (Gross Domestic Product) GDP thus is an aggregate quantification of the total worth of the net output of all the domestic producing units of a nation or territory during particular period. It is pertinent to note that the GDP is associated with the net output not 'gross output'. This cannot be derived by simply adding all the gross output of each of the producing units to attain a meaningful figure on total production of the economy since there would be a plethora of double counting. GDP is determined on the basis of the 'value added' at each stage. (Introduction to Gross Domestic Product (GDP) Gross National Product (GNP) Balance of Payments (BoP) Statistics)

Gross Domestic Products incorporate only the final products and services. It eliminates the possibility of double or multiple counting, by excluding any intermediate goods used in production of such final goods or services. GDP accounts for the actual production of the nation over the year and not the goods or services that are actually sold. It excludes non-production transaction. The measurement is not inclusive of non-productive transactions, and is designed to quantify what is actually produced or generated over the current period. The prevailing assets or property associated with selling and transfer during the period is not incorporated for the purpose of counting. The welfare measures such as transfer payments like extension of social security measures and cash welfare benefits are not incorporated while counting the GDP. (Chapter 7 Measuring Domestic Output, National Income, and the Price Level)

Even the private transfer payments such as student allowances or alimony payments are also excluded from counting. So also the sale of stocks and bonds are not included in the accounting process. It is pertinent to note that GDP fails to quantify some of the useful output on the plea that those are not paid, such as home makers' services, parental child care, volunteer efforts, and home improvement projects.

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GDP fails to quantify the improvements in the product quality or make allowances for enhanced leisure time. GDP does not quantify improved living standards in consequence with more leisure. GDP makes no value adjustments for variations in the constituents of output or the distribution of income. (Chapter 7 Measuring Domestic Output, National Income, and the Price Level)

DQ2.

Several types on unemployment prevail in the real conditions of labor market. They are grouped under the heads of demand-deficient or cyclical unemployment, seasonal unemployment, frictional or search unemployment and structural unemployment. The Demand deficient unemployment results when there is no sufficient demand to employ all those who desire to work. It is a kind of unemployment that the Keynesian economists concentrate on specifically, while they believe it to happen when there is disequilibrium in the economy. It is also sometimes recognized as cyclical unemployment since it will change with the trade cycle. Seasonal unemployment as the very concept indicates, implies the employment for only a particular period of the year and for the rest of the periods they are unemployed. (Unemployment Theories - Types of Unemployment - Which type is typical?)

The impact of the seasonal unemployment is mostly regionalized. The worker leaving a job and searching for another one temporarily creates unemployment involving a reasonable period of time in pursuit of the right job. This generates unemployment while they go on searching for the right job. The more efficient the job market in providing the people work the lesser the magnitude of such type of unemployment. Such type of unemployment is known as frictional or search unemployment. This unemployment is resulted out of the imperfect information in the market. The structural unemployment is another form of unemployment that results out of variations in the structure of industries. As….....

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