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Understanding GDP: Gross Domestic Product

GDP estimates are commonly used to determine the economic performance of a whole country or region, and to make international comparisons.


Nominal GDP, however, does not reflect differences in the cost of living and the inflation rates of the countries; therefore using a GDP PPP per capita basis is arguably more useful when comparing differences in living standards between nations.


GDP is not a complete measure of economic activity. It accounts for final output or value added at each stage of production, but not total output or total sales along the entire production process.


IN SHORT: GDP = "Economic Production"

NOTE: Another way of explaining it is "GDP is how a country measures its econoimic contributed value"


In a brief example: Think if Ford Made a car (In the U.S) and sold it to Germany; The U.S would have made that car (in our country) and sold it to another country and made profit off of that which would then help improve our economy.

Understanding GDP

Nominal GRP Vrs "Real" GDP

Make Our Country Money:

By "Making" and "Selling Our Stuff To Others"



E.G: Ford Makes A Car In "Detroit" and Sells

It to another country for $28,000


U.S would have then made $28,000 in GPD


"In Summary: The more products we make in "Our Country" and sell to others; the more profit we make to help pay off our negative debt and boost our economy.

GDP is a financial measure of the value of all final goods and services produced in a period (quarterly or yearly)within its country.