Learner's spot

Basic Concepts What is a good? It is any physical object, natural or man-made or services rendered that could command a price in the market. The goods are classified into two categories: Consumption goods and Capital goods.   Final goods and Intermediate goods. S.No. Consumption goods Capital goods 1 They are those goods which are purchased or own produced for the satisfaction of wants or needs. They are those goods which are purchased for producing other goods with the motive of generating income or profit. 2 The goods are used by the households. These goods are used by the firms. 3 They are further classified into: Durable goods: These goods are used for longer period of time. For e.g.: Furniture, T.V., A.C., etc. Non-durable goods: These goods are used for the short period or immediate consumption. For e.g.: Food, vegetables, fruits, etc. They are further classified into: Dura

Ø   GDP (Gross domestic product)       The final products within the boundaries of India within that specific period of time are in the GDP of India. Further, the effect of inflation on these products is also calculated.       GDP includes government expenditures, consumption, exports, imports, and investment of India.      For example, if Honda decides to manufacture it’s parted in India than that will go into the GDP of India. But the revenues got through the sales are included in the GDP of Japan. Ø   GNP (Gross national product       GNP of the country is measured by the income which is collected due to the various factors of production that are owned by the residents or the citizens of India. The GNP of India is calculated by adding the net inflow coming from the abroad countries to the GDP of India while subtracting net outflow to the foreign countries from India. As per the previous example, if Honda is an Indian company and it is selling its parted in other countries t