GDP is the market value of all goods and services produced in an
economy during a financial year. There are mainly three method to
calculate GDP:
- Value added method: It adds up the value addition of goods in
every step of production process.
- Income method: It adds the income earned in economy from
production. It is calculated as rent Income + Income from jobs +
Profit of businesses.
- Expenditure method: It is calculated as Consumption +
Investment + Government Spending + Exports - Imports.
GDP from all three methods sums up to the same value.