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The Gross Domestic Product (GDP) or Gross Domestic Income (GDI) is a measure of a country’s overall economic output in monetary terms. GDP is normally calculated each quarter and is considered a major indication of the economic health of a country.

There are as many different ways of calculating Gross Domestic Product, not to mention Gross National Product so you will find different political parties, media commentators, economists and academics coming out with differing figures.

However there is general agreement GDP can be measured in three more or less generally accepted ways:

  1. Production (GDP(P)): This measures the Gross Domestic Product as the sum of all the Value Added by all activities which produce goods and services.
  2. Income (GDP(I)): This measures the Gross Domestic Product as the total of incomes earned from the production of goods and services.
  3. Expenditure (GDP(E)): This measures the Gross Domestic Product as the total of all expenditures made either in consuming finished goods and services or adding to wealth, less the cost of imports.

GDP includes income earned domestically by foreigners, but does not include income earned by domestic residents elsewhere.

In short GDP is the market value of all final goods and services made within the borders of a country in a year.

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Category: Guide to City Jargon 

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