What is Gross Domestic Product?
- Gross Domestic Product (GDP) is a key economic indicator that measures the total value of all goods and services produced within a country’s borders over a specific period. It serves as a comprehensive measure of a nation’s economic performance and is often used to assess and compare the economic health of different countries.
- GDP = Consumption + Government Spending + Investment + Net Export
How Do I Remember it?
- Think of Gross Domestic Product as the total of everything a country produces. It includes goods like cars and services like education. It’s like adding up the value of everything made and done within a country.
Real World Example
- For instance, if a country produces cars, and computers, and provides services like healthcare and education, the GDP captures the total value of all these economic activities. When GDP increases, it suggests that the economy is growing, while a decrease may indicate an economic downturn or shrinkage.
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By: Ryan Aquino
