We were taught that the GDP of a country is the sum of all finished products and services within the borders of the country.

    Now, the question is that in case of rising gdp, who is paying for this (rising value of the sum) and where the extra money is coming from?

    Like if my last year's gdp was 500 billion and this year's is 550 billion, it means I produced worth 50 billions worth more. Now where's this extra payment coming from? One source which is easy to understand is foreign buyers buying my products, but many times the rise in gdp is much higher than the rise in exports. In such cases, if people in my country are taking loans to buy those extra 50 billions, doesn't it mean that I have a negative 50 billion added as well which will neutralise the raised amount?

    I couldn't frame it the best way but hope you understood the question.

    How is wealth actually created?
    byu/Indra_Kamikaze inAskEconomics



    Posted by Indra_Kamikaze

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