📐Module 2 · Level 4
GDP & Growth
How we measure the size of an economy and what drives it to grow over time.
Measuring GDP
GDP = Consumption + Investment + Government Spending + Net Exports (C + I + G + NX). India's GDP is about $3.5 trillion. The US leads at ~$26 trillion. GDP is the standard measure of economic output.
What Drives Growth?
Long-term growth comes from three sources: more labor (population), more capital (factories, machines), and better technology (productivity). Countries that invest in education, infrastructure, and innovation grow faster.
- •GDP measures total output but not well-being or equality
- •Real GDP adjusts for inflation; nominal GDP doesn't
- •India is the 5th largest economy by nominal GDP, 3rd by PPP
- •GDP per capita is a better measure of living standards than total GDP
💡 Did You Know?
India's GDP was the world's largest until about 1700 AD, when it represented nearly 25% of global output. The UK's Industrial Revolution shifted the balance.