GDP stands for Gross Domestic Product. It is the most comprehensive measure of economic activity in a country, capturing the monetary value of all finished goods and services during a given time period.
US GDP for 2019 was $21.4 trillion.
GDP = C + I + G + (X – M), where
- Personal consumption (C), all the stuff and services you and I spend money on every day
- Investment (I), all the money businesses invest in equipment, buildings, technology, inventories and residential investment too
- Government spending (G), everything the federal, state and local government spends
- Net exports (X-M), or all the goods we export less all the goods we import
GDP is a critical economic measure used to estimate the size, growth and overall economic health of countries as a whole.« Back to Glossary Index