Gross Domestic Product (or GDP) is the total measure
of the market or currency value of all the goods and services
produced by the country over a specific period of time. This
measurement is also, according to economists, the best indicator of
the country's economic growth.
There are three ways to compute the Gross Domestic
Product of a country. These three methods though, should arrive at
the same results. The first is the product (or output) method where
all the goods of every class of enterprise are added to get the sum
total. The second is the expenditure approach where the total
consumption of the private sector is added to the gross income, the
public spending (or government spending), and the net export of a
country. The last method is the income method which sums up the
total income of all producers, the employees' compensations, taxes
and reduced from subsidies.
Gross Domestic Product is a mark of the overall
condition of a country's economy. A rise or loss in GDP is seen as
an indicator of future economic conditions for the country. For
example, if the current GDP is significantly lower than the
country's previous GDP, the country is considered to be in a
recession.
Contrary to what people may think though, Gross
Domestic Product is different from Gross National Product (or GNP).
GDP is the sum total of the market value of goods and services
producedina country; while GNP is the sum total of the market value
of goods and services produced by the country, provided that those
goods are services arenotproduced in the country. Meaning, if a
citizen of a country has a corporation overseas - the income of the
company would be added to the country's GNP, not the GDP.
Gross Domestic Product (GDP) - Periodic Currency
Value Of Goods And Services