Gdp Growth

Question: ‐ Is It Possible to Guarantee Development Having Zero Real GDP
Growth Rate? GDP:‐GDP is defined as the total market value of all final goods and services produced within the country in a given period of time (usually a calendar year).

Economic development
Generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area. Economic development can also be referred to as the quantitative and qualitative changes in the economy. Such actions can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives.

Economic growth
Increase in a country's productive capacity, as measured by comparing (GNP/GDP) in a year with the GNP/GDP in the previous year. Increase in the capital stock, advances in technology, and improvement in the quality and level of literacy are considered to be the principal causes of economic growth. In recent years, the idea of sustainable development has brought in additional factors such as environmentally sound processes that must be taken into account in growing an economy.
GDP = C + I + G + (X‐M).
C=

Consumption

I=

Gross investment

G=

Government spending

X=

Exports

M=

Imports

There are two ways that GDP can increase:‐
1. An increase in the prices of goods and services.
2. An increase in the Quantity of goods and services.

New _ Value− Old _ Value
GDP _ Percent_ Change= %Δ =
×100
Old _ Value

For Example we can alalysis the following table

2010

2011

Product

Quantity(Q)

Price(P) PQ

Quantity

Price

PQ

Car

20

80

25

64

1600

1600

GDP percent change in relation to 2010 = {(1600‐1600)/1600} X 100 =0 %

If we look at the above table the quantity is more than the previous year 2010 and the price is fall down according to the price quantity theory. But in GDP measuring there is 0% change in GDP. We cannot say boldly that there is no change in development in comparison to the year 2010. In comparison with the two year we can analysis the following thing:‐
1. The production is much higher than the previous year.
2. When the production is more than there needed more manpower.
3. When the price will fall then the demand will more.
4. There is an increase of money supply in the market.
5. Company will make more production although lessen the profit of per goods but in collectively company will expand higher. In true words per unit profit is less but for increase in selling the total profit is higher.
If we look at the broader aspect we can see the findings below
1. Spending tax or save money can good to the economy. Govt. expenditure and
Private investment is much more needed for development in case of zero GDP.
2. Giving more tax to the govt. the consumption of the citizen will be reducing and
Govt. can invest more in the development arena.
3. When people are saving more the interest rate will be falling down and Govt. can make loan at lower interest rate and development increases than before.
Finally we can understand that in case of zero real GDP the development will be going on. It is possible to make some change in the economic structure. (Number of words= 518)

Submitted To :
Md. Mustafa Murshed
Deputy Director(Planning and Development)
BCS Administration Academy

Shahbag, Dhaka

Submitted By :
Md. Mazharul Islam
Assistant Commissioner
ID NO. 16803, Roll No. 29 th 85 Law And Administration Course

Bangladesh Civil Service Administration Academy
Shahbag, Dhaka – 1000