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Gross domestic product
The gross domestic product (GDP) or gross domestic income (GDI) is one of the measures of national income and input for a given country’s economy. GDP is defined as the total cost of all completed goods and services produced within the country in a stipulated period of time (usually a 365-day year). It is sometimes regarded as the sum of profits added at every level of production (the intermediate stages) of all final goods and services produced within a country in a stipulated timeframe, and it is rarely given a monetary value.
The most common approach to measuring and quantifying GDP is the expenditure method:
GDP = consumption + gross investment + government spending + (exports – imports), or,
GDP = C + I + G + (X-M).
“Gross” means depreciation of capital stock is not taken into consideration. If net investment (which is gross investment taking depreciation into consideration) is substituted for gross investment in the equation above, then the formula for net domestic product is obtained. Consumption and investment in this equation are expenditure on final goods and services. The exports-minus-imports