Understanding GDP: The Measurement of Economic Activity

📊GDP measures a country's total economic output and is calculated using different approaches.

💰The expenditure approach sums up the total value of all final goods and services produced.

💵The income approach adds up all the income earned in the economy.

🔢The value-added approach calculates GDP by adding up the value of all goods and services produced and subtracting the value of intermediate goods.

🌍GDP is an important indicator of the health of an economy and can be used to analyze historical events and business cycles.

What is GDP?

—GDP, or Gross Domestic Product, is a measure of a country's total economic output.

How is GDP calculated?

—GDP can be calculated using different approaches, including the expenditure approach, income approach, and value-added approach.

What is the expenditure approach?

—The expenditure approach sums up the total value of all final goods and services produced.

What is the income approach?

—The income approach adds up all the income earned in the economy.

What is the value-added approach?

—The value-added approach calculates GDP by adding up the value of all goods and services produced and subtracting the value of intermediate goods.

00:05GDP, or Gross Domestic Product, is a measure of a country's total economic output.

00:18GDP can be calculated using different approaches, including the expenditure approach, income approach, and value-added approach.

00:33The expenditure approach sums up the total value of all final goods and services produced.

00:37The income approach adds up all the income earned in the economy.

00:57The value-added approach calculates GDP by adding up the value of all goods and services produced and subtracting the value of intermediate goods.