What does Gross Domestic Product (GDP) measure?

Gross Domestic Product (GDP) is a comprehensive measure that sums up the total monetary value of all goods and services produced within a country over a specified period, typically a year or a quarter. This includes everything from the production of consumer goods to services such as healthcare, education, and entertainment. The significance of GDP lies in its ability to provide a snapshot of a country's economic performance and health, making it a key indicator for policymakers, economists, and investors.

By considering both goods and services, GDP reflects the breadth of economic activity, capturing the contributions of various sectors, including agriculture, manufacturing, and services. This holistic view allows for a more accurate representation of an economy's overall size and growth rate. The reliance on monetary value also means that GDP can be used to compare economic performance across different countries and time periods, facilitating analysis of trends in economic growth and living standards.