Gross Domestic Product (GDP) is the total value of goods manufactured and services provided within a country over a period of time. It includes all production and services within the country, even if they are provided by entities owned by foreigners. GDP is a high-level indicator of the economic health of a country. The calculation of GDP is as follows:
+ Personal consumption expenditures
+ Business investment
+ Government spending
= Gross domestic product
This basic calculation is called nominal GDP, because it does not include an adjustment for price inflation. When the amount is reduced for price inflation, it is called real GDP.
GDP is typically measured on a trend line, to plot changes in a country’s GDP over time. The most common measurement reported from this trend line is quarterly changes in GDP. GDP is also measured on a per capita basis, to determine the average GDP per person; doing so eliminates the effect of highly populous countries that report high aggregate GDP, but which have low GDP on a per-person basis.