What economic indicator measures the total value of all finished goods and services produced within a country?

Gross Domestic Product measures the total market value of all final goods and services produced within a country during a specific period. It is commonly abbreviated as GDP and is one of the main indicators used to describe the size and activity of an economy.

GDP can be calculated in three theoretically equivalent ways: by adding production or value added, by summing incomes earned through production, or by totaling expenditure on final output. The expenditure identity is commonly written as Y = C + I + G + (X − M), covering consumption, investment, government spending and net exports.

The word “domestic” refers to geographic boundaries, so production inside a country counts even when the producer is foreign-owned. That distinguishes GDP from Gross National Product, which follows the income or production associated with a country’s residents or citizens. “Gross” means depreciation of fixed capital has not been subtracted.

GDP is not the same as living standards. It does not fully capture income distribution, unpaid household work, environmental damage or quality of life. Nominal GDP uses current prices, while real GDP adjusts for inflation.