What does GDP stand for, and what does it measure?

GDP stands for Gross Domestic Product, which is a crucial measure of a country's economic performance. It quantifies the total value of all goods and services produced over a specific time period within a nation's borders. This measure reflects the economic activity and health of a country's economy, providing insights into the size and productivity of that economy.

When GDP increases, it generally indicates that the economy is doing well, with businesses producing more goods and services, which can lead to job growth and higher income levels. Conversely, a decrease in GDP might signal an economic downturn. Understanding GDP allows economists and policymakers to gauge overall economic performance and make informed decisions regarding fiscal and monetary policies.