GDP stands for gross domestic product. It’s the social measure of the economy’s total output of goods and services. The definition of GDP is as follows: it is the total market value of all final goods and services produced during a given period within a nation’s domestic borders.
The word ‘domestic’ (in ‘gross domestic product’) means that we only count things produced within our domestic borders, even if foreigners pay them. It doesn’t matter. Nothing made outside of our domestic borders gets counted in the GDP.
What are different ways to Calculate GDP?
There are two widely accepted ways to measure the total production in an economy. One is called the income approach, and the other is called the expenditure approach.