What Is GDP?
the letters gdp are ? around often by the president, the federal reserve board, journalists and many others. they stand for gross domestic product, which represents the overall market value of all the goods and services a country produces. in a way, it's like a price tag on a country's output and that measures the size of the economy. the price is determined with the following formula. c plus g plus i plus nx equals gdp, where c is the nation's private consumption or consumer spending, g is the sum of government spending, i is the sum of businesses' capital spending and nx is the nation's total net exports, exports minus imports. gdp is an important number because it indicates whether a country's economy is growing and expanding or shrinking and contracting. it also gives important information about how the introduction of new products and services or the improvement of existing ones affect demand. this data helps to plan future product development and improvements. it also helps a country to ? its economy up against others in the world and determine whether it's growing at a comfortable rate. while it's not a perfect science, gdp can also be used to get a estimate of a country's standard of living. the idea is that as a country's goods and services become more valuable ? and as the gdp rises, so does the standard of living for the citizens of the country, since they profit from creating and providing the products and services. for these reasons, gdp is one of the most common indicators used to gauge a country's economic health.