Gross Domestic Product

Knowledge Center

What is Gross Domestic Product? Meaning.

Gross Domestic Product (GDP) is an economic measure of all economic goods and services produced by a country during a specific period of time (normally 1 year).

It is calculated by adding the total value of a country's annual output of goods and services, which is:

GDP  =  Private Consumption + Business Investments in Capital + Government Spending + Change in Inventories + Exports - Imports.

GDP differs from Gross National Product (GNP) in excluding inter-country income transfers, in effect attributing to a territory the product generated within it rather than the incomes received in it.

GDP is used as an indicator of the standard of living in an economy. Some limitations in this respect include:

• GDP does not take into account the black economy.

• Quality of life contains more things than physical goods (economic or not).

• GDP doesn't measure the sustainability of growth.

• If a nation saves money and invests it overseas, such as Japan, it's GDP will be diminished. However there is a future value of this.

• If a nation spends borrowed money, like the US, it's GDP will be increased. However there is a future negative value of this.

Forum Forum about the Gross Domestic Product. Below you can ask a question about this topic, share your experiences, report a new development, or explain something. Start a new topic about the Gross Domestic Product

Information Sources Various sources of information regarding the Gross Domestic Product. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

Research Links Jump to further research sources regarding the Gross Domestic Product. News Videos Presentations   Books Academic More

Compare with: Diamond Model  |  PEST Analysis

Return to Management Hub: Finance & Investing  |  Strategy & Innovation

More on Management  |  Return to Management Dictionary

This ends our Gross Domestic Product summary and forum.