👉 Gross Domestic Product (GDP) is a measure of a country's total economic output, calculated by summing up the value of all final goods and services produced within its borders over a specific period, typically a year. It's often broken down into three main components: Consumption (C), Investment (I), and Government Spending (G). The basic formula for GDP is GDP = C + I + G. Consumption includes spending by households on goods and services, Investment covers business expenditures on capital goods, and Government Spending is the amount spent by the government on public services and infrastructure. GDP can also be calculated using the income approach, which sums up all incomes earned in production (wages, profits, rents, and taxes), or the value added approach, which adds up the value of each stage of production across all sectors. This comprehensive measure provides insight into a nation's economic health and growth potential.
