Question

Which is the best description of GDP

Answer 1

Answer:

GDP (Gross domestic product) represents the total market value of all finished goods and services produced within a country's geographic borders in a specified period of time. It doesn't matter if it is produced by citizens of the country or foreigners. It is quantitative measure of a country's economic health. It represent the size of economy of a country and its growth rate.

It is generally calculated on annual basis.

Formula of GDP is as follows:

GDP = Personal consumption of goods/services + Government Expenditures + business investment + Net Exports(i.e after deduction of imports)

GDP can be calculated on (i) Expenditure basis (i.e. how much money was spent), (ii) Output basis (i.e. how much goods or serives were sold) or (iii) income basis (i.e. how much income was earned)