Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is the total value of goods and services produced within a country in a given period of time, usually a year. It is a measure of the size and strength of an economy. GDP is typically calculated by adding up the values of all the goods and services produced in a country, including consumer goods, capital goods, and government services. The GDP of a country is often used as an indicator of the overall health and growth of its economy.
There are several ways to calculate GDP, but the most common method is the “expenditure approach,” which measures GDP by adding up the total spending on goods and services within a country. This includes personal consumption, investment by businesses, government spending, and net exports (exports minus imports).
GDP is expressed in monetary terms, so it is adjusted for changes in prices over time using a measure called the “GDP deflator.” This allows economists to compare GDP across different time periods and to determine the real growth rate of an economy, taking into account inflation or deflation.
