TOPIC :- RELATION BETWEEN

GDP AND INTEREST RATE.

GROSS DOMESTIC PRODUCT:WHAT IS GDP?

GDP is the total market value of all final goods & services produced within a country in a given period of time

WHY GDP IS IMPORTANT?

GDP acts as an economic barometer of the nation.

GDP And Ways Of Measuring It:Nominal GDP=Goods are evaluated at a current year prices. Ex: Nominal GDP of 2005= (2005 price X 2005 quantity) Real GDP=Goods are evaluated at a constant year prices. Ex: Real GDP of 2005 using 2000 year price = (2000 price 2005 quantity) GDP Deflator= (nominal gdp/real gdp)*100

Methods Of Calculating GDP: EXPENDITURE APPROACH: Adds different categories of expenditures by

households,firms and government together. Y=C+I+G+(X-M) Y=GDP,C=Consumption Expenditure, I=Investment expenditure,X=exports,M=Imports

 INCOME APPROACH: Another way of measuring GDP is to measure the

total income of a country. GDP=N+D+T+F N=National Income, D= Depriciation, T=Indirect taxes minus subsidies, F=Net factor payments the rest of the world.
VALUE ADDED APPROACH:

Value added is a increase in the value of the product at each

successive stage of the production process To avoid double counting, value added method is used

GDP GROWTH RATE:-

Interest Rate
WHAT IS INTEREST RATE ?

WHY IT IS CALCULATED?

How Interest Rate Is Calculated

Interest Rate Of Last 5 Years

Factors Affecting Interest Rates