Gdp Definition

GDP is the total value of all final goods and services produced in an economy in a given period of time. It is often used as a measure of a country’s economic performance.

GDP can be measured in nominal terms, which include inflation, or in real terms, which exclude inflation. Nominal GDP is typically used when comparing GDP across countries or over time. Real GDP is typically used when examining changes in economic output within a single country over time.

There are two ways to measure GDP: by expenditure or by production. The expenditure approach calculates GDP by adding up all spending on final goods and services. The production approach calculates GDP by adding up the values of all outputs produced within an economy.

GDP growth can be measured in absolute terms or in relative terms. Absolute GDP growth is the increase in GDP from one period to another without taking into account population growth or inflation. Relative GDP growth is the increase in GDP from one period to another after taking into account population growth and inflation.