What is Gross Domestic Product (GDP)?

Gross Domestic Product (GDP)

The market value of all finished goods and services produced within a country in a year.

Finished goods

Goods that will not be sold again as part of some other good, such as cakes or eggs sold to consumers.

Intermediate goods

Goods used to produce finished goods, such as flour and eggs for baking, that are not counted in GDP.

Capital goods

Finished goods used to produce other goods, such as tractors sold to a farm, which are counted in GDP.

GDP registration

The process of calculating the total market value of finished goods and services produced in a given year.

Nominal GDP

The measure of a country's economic output without adjustments for inflation.

Real GDP

The measure of a country's economic output that is adjusted for inflation, providing a more accurate representation of economic growth.

Exports

Goods produced in one country and sold to another; exports contribute to the producing country's GDP.

Imports

Goods brought into a country from abroad; imports do not contribute to the importing country's GDP.

Limitations of GDP

GDP does not account for non-market transactions, such as environmental goods or services that don't have an observable market price.