You hear the term GDP but what is it? GDP is an acronym for Gross Domestic Product and it's one measure of a given country's national income and output.
The GDP is the final value of all good and services produced in a country in a given time frame, usually a calendar year. The world map below shows the GDP of all countries in 2007. (The get a better view just click the image)
View image
The key to understanding GDP is below.
GDP = consumption + gross investment + government spending + (exports − imports), or,
Y = C + I + G + NX
We'll tackle GDP components next.