GDP

GDP

See: Gross Domestic Product

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GDP

See gross domestic product.

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Gross Domestic Product

A measure of the value of the total production in a country, usually in a given year. Gross domestic product is calculated by adding together total consumer spending, total government spending, total business spending, and the value of net exports. GDP is considered one of the leader indicators of the health of a nation's economy. GDP growth is considered desirable and represents the fact that businesses are producing and that consumers and the government are buying. It is often used as a way to measure a country's standard of living. See also: GNP.

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Gross domestic product (GDP). The total value of all the goods and services produced within a country's borders is described as its gross domestic product.

When that figure is adjusted for inflation, it is called the real gross domestic product, and it's generally used to measure the growth of the country's economy.

In the United States, the GDP is calculated and released quarterly by the Department of Commerce.

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Gross Domestic Product (GDP)

What Does Gross Domestic Product (GDP) Mean?

The monetary value of all the finished goods and services produced within a country's borders in a specific period; GDP usually is calculated on an annual basis and includes all private and public consumption, government outlays, investments, and exports less imports that occur within a defined territory. GDP = C + G + I + NX (where C = all private consumption, or consumer spending, in a nation's economy; G = the sum of government spending; I = the sum of all the country's business spending on capital; NX = the nation's total net exports, calculated as total exports minus total imports).

Investopedia explains Gross Domestic Product (GDP)

GDP is used commonly as an indicator of the economic health of a country as well as to gauge a country's standard of living. Critics of GDP contend that the statistic does not take into account the underground economy: transactions that for whatever reason are not reported to the government. Others say that GDP is not intended to gauge material well-being but serves as a measure of a nation's productivity, which is unrelated.

Related Terms:
• Bear Market
• Bull Market
• Consumer Price Index—CPI
• Inflation
• Nominal GDP