Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of the country’s economic health.
Gross domestic product (GDP) is one of the most common indicators used to track the health of a nation's economy. It includes a number of different factors such as consumption and investment. In this short article, we look at why GDP is such an important economic factor, and what it means for both economists and investors.
It represents the total dollar value of all goods and services produced over a specific time period, often referred to as the size of the economy. GDP is usually expressed as a comparison to the previous quarter or year.
GDP stands for "Gross Domestic Product" and represents the total monetary value of all final goods and services produced (and sold on the market) within a country during a period of time (typically 1 year).
GDP is the most commonly used measure of economic activity.
KEY TAKEAWAYS
- Gross domestic product tracks the health of a country's economy.
- It represents the value of all goods and services produced over a specific time period within a country's borders.
- Economists can use GDP to determine whether an economy is growing or experiencing a recession.
- Investors can use GDP to make investments decisions—a bad economy means lower earnings and lower stock prices.
Gross Domestic Product (GDP) Defined
GDP is primarily used to gauge the health of a country's economy. It is the monetary value of all the finished goods and services produced within a country's borders in a specific time period and includes anything produced by the country's citizens and foreigners within its borders.
