Spaces VS Blogger
GDP is defined as the total value of all goods and services produced within that territory during a specified period (or, if not specified, annually, so that "the UK GDP" is the UK’s annual product). GDP differs from gross national product (GNP) in excluding inter-country income transfers, in effect attributing to a territory the product generated within it rather than the incomes received in it.
Whereas nominal GDP refers to the total amount of money spent on GDP, real GDP refers to an effort to correct this number for the effects of inflation in order to estimate the sum of the actual quantity of goods and services making up GDP. The former is sometimes called "money GDP," while the latter is termed "constant-price" or "inflation-corrected" GDP — or "GDP in base-year prices" (where the base year is the reference year of the index used). See real vs. nominal in economics.
A common equation for GDP is:
GDP = consumption + investment + exports – imports
Economists (since Keynes) have prefered to split the general consumption term into two parts; private consumption, and public sector spending. Two advantages of dividing total consumption this way in theoretical macroeconomics are:
* Private consumption is a central concern of welfare economics. The private investment and trade portions of the economy are ultimately directed (in mainstream economic models) to increases in long-term private consumption.
* If separated from endogenous private consumption, Government consumption can be treated as exogenous, so that different government spending levels can be considered within a meaningful macroeconomic framework.
Therefore the standard GDP formula is expressed as:
GDP = private consumption + government + investment + net exports
(or simply GDP = C + I + G + NX)
"Third World" are all the other countries, today often used to roughly describe the developing countries of Africa, Asia and Latin America.
The term Third World includes as well capitalist (e.g., Venezuela) and communist (e.g., North Korea) countries as very rich (e.g., Saudi Arabia) and very poor (e.g., Mali) countries.