GDP Concepts: Caiib Paper 1 (Module A), Unit 9

GDP Concepts: Caiib Paper 1 (Module A), Unit 9

Dear Bankers,
We all know that CAIIB exams are conducted by the Indian Institute of Banking and Finance (IIBF).  CAIIB is said to be one of the difficult courses to be cleared for the bankers. But we assure you that with the help of our “CAIIB study material”, you will definitely clear the CAIIB exam.
CAIIB exams are conducted twice in a year. Candidates should have completed JAIIB before appearing for CAIIB Exam. Here, we will provide detailed notes of every unit of the CAIIB Exam on the latest pattern of IIBF.
So, here we are providing “Unit 9: GDP Concepts” of “Module A: Economic Analysis” from “Paper 1: Advanced Bank Management (ABM)”.

The Article is Caiib Unit 9: GDP Concepts

♦GDP Concepts

  • Gross Domestic Product (GDP): It is the total market value of all the final goods and services produced within the territorial boundary of a country, using domestic resources, during a given period of time, usually 1 year.
  • Gross national Income at Market Price = GDP at Market Price + Taxes less subsidies on production and imports (net receivable from abroad + Compensation of Employees (Net Receivables from abroad) + Property income (Net receivables from abroad)
  • Gross National Product (GNP) = GDP + Total Capital gains from overseas investment (-) income earned by foreign nationals domestically

GNP= GDP+NR (Net Income from assets abroad  (Net Income Receipts) )

GDP Computation

According to the National Income Accounting, there are three ways to complete GDP:

  • Expenditure wise
  • Income wise
  • Product wise
Expenditure Method  

GDP= Consumption + Gross Investment + Government Spending + (Exports- Imports) GDP = C+I+G+(X-M)

  • Consumption: This included personal expenditures pertaining to food, households, medical expenses, rent, etc
  • Gross Investment : Business Investment as capital which includes construction of a new mine, purchase of machinery and equipments for a factory, purchase of software, expenditure on new houses, buying goods and services but investments on financial products is not included as it falls under savings.
  • Government spending: It is the sum of government expenditures on final goods and services.
  1. Exports: This includes all goods and services produced for overseas consumptions.
  2. Imports: This includes any goods or services imported for consumption and it should be deducted to prevent from calculating foreign supply as domestic supply.
 Income Approach 

GDP from the income is the sum of the following major components:

  1. Compensation of employees
  2. Property income
  3. Production taxes and depreciation on capital
  • Compensation of Employees: It represents wages, salaries and other employee supplements.
  • Property Income: It constitutes corporate profits, proprietor’s income, interests and rents.
  • GDP at market price measures the value of output at market prices after adjusting for the effect of indirect taxes and subsidies on the prices. Market price is the economic price for which a good or service is offered in the market place.
  • GDP at factor cost measures the value of output in terms of the price of factors used in its production.
  • GDP at factor cost = GDP at Market Price – (Indirect taxes – Subsidies)
 Product Approach

In India we have getting GDP product wise belongs to 8 sectors.

Basic Concept of National Income

Net Domestic Product (NDP):

Gross National Product (GNP):

  • GNP= GDP+ NFIA (Net factor income from aborad)
  • GDP= GNP- NFIA

Net National Product (NNP):

  • NNP= GNP- Depreciation

Net Domestic Product (NDP):

  • NDP= NNP – NFIA
  • NNP= NDP + NFIA

Read More Article Caiib Paper-1, Module A

Telegram Group:- Click Here

Visit Online Mock test Site: test.ambitiousbaba.com

Caiib Paper

Mock Link

CAIIB Paper-I (Advanced Bank Management ) Online Mock Tests
Click Here 
CAIIB Paper-II (Bank Financial Management) Online Mock Tests
Click Here
CAIIB Optional Paper(Retail Banking in India) Online Mock Tests
Click Here 
Combo
Click Here

Leave a Reply