Gross Domestic Product (GDP)

About

Gross Domestic Product (GDP) is a widely used economic indicator that measures the total value of all final goods and services produced within a country's borders over a specific period. It encompasses both market and non-market production, including government services like defense and education. GDP serves as a comprehensive scorecard for assessing a country's economic health and growth rate. It includes goods and services produced for sale, investments, and government spending, while excluding intermediate consumption. GDP can be calculated using three main approaches: the expenditure, income, and production methods. The expenditure approach sums up consumer spending, government spending, investments, and net exports. GDP is crucial for policymakers as it helps assess economic performance, guide fiscal policies, and evaluate the impact of economic shocks. Despite its importance, GDP has limitations, such as not accounting for unpaid work or environmental impacts. Nonetheless, it remains a key tool for international comparisons and economic analysis.