Gross Domestic Product (GDP) is a measure of the economic output of a country or a region. It represents the total value of all goods and services produced within a specific geographical area within a certain time period, usually a year. It is the most widely used indicator of a country’s overall economic performance and is used to compare the economic output of different countries.
GDP is calculated by adding up total consumption, investment, government spending, and net exports. The formula for calculating GDP is:
GDP = C + I + G + (X – M)
Where: C = consumption I = investment G = government spending X = exports M = imports
A higher GDP typically indicates a higher standard of living for a country’s citizens, as well as a growing economy. Conversely, a decreasing GDP may indicate an economic downturn or recession.