Gross domestic product

Gross domestic product (GDP) is the market value of final goods and services produced within a country’s borders during a specified period. It measures production, not the income or wealth of residents alone.

Expenditure approach: A method of calculating GDP by summing spending on final goods and services produced domestically. It expresses GDP as consumption, investment, government purchases, and net exports.
National accounts: A standardized framework for recording an economy’s production, income, and spending. GDP is a central aggregate within this system of linked economic accounts.
Real GDP: GDP adjusted for price changes to measure changes in the volume of production. It separates output growth from inflation in comparisons over time.
GDP and welfare: The study of how well GDP tracks people’s material living conditions and broader well-being. GDP is often used as a welfare proxy despite omitting many valued outcomes.
Income approach: A method of measuring economic output by summing incomes generated in production. It measures the same production as GDP through wages, profits, and other factor incomes.
Intermediate consumption: Goods and services used up in producing other goods and services during an accounting period. These inputs are excluded as separate final output to prevent double counting.
GDP deflator: A price index comparing nominal GDP with real GDP. It converts current-price output into a measure adjusted for domestic price changes.
Genuine Progress Indicator: A measure that adjusts economic activity for social and environmental costs and benefits. It offers an alternative to treating rising GDP as equivalent to social progress.
Value added: The value a producer adds to inputs, equal to output value minus intermediate consumption. Summing value added avoids counting intermediate goods repeatedly in GDP.
Gross fixed capital formation: Acquisitions less disposals of produced fixed assets used repeatedly in production. It is the national-accounts measure of investment included in GDP.

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