Gross domestic product
In economics, the gross domestic product (GDP) is how much a place produces in some amount of time. For nations, the GDP can be calculated by adding up its output inside the borders of that country. To know the GDP of a country, you need to add up consumer spending, investment spending, government spending and the value of the exports and subtract the value of the imports.
This measure is often used to find out how healthy a country is, in an economic way. In other words, a country with a high value of GDP can be called a large economy. The biggest GDP in the Americas is the United States, Germany in Europe, Nigeria in Africa and China in Asia.
There are different ways to calculate the GDP. The nominal GDP is the total amount of money spent on GDP, the real GDP (like how the word "real" is often used in economics) tries to correct this number for inflation. For example, if the prices rise by 2% (meaning, everything costs 2% more), and the nominal GDP grows by 5%, the real GDP growth is still only 3%. GDP per capita is the total income of a country, divided by the number of inhabitants. It shows how much money people make on average at work.
- OECD Reviews of Regulatory Reform, 2004, p 92
- China and the World Economy, Yih-chyi Chuang, Simona Thomas - 2010