Measuring a Nation's Income

Gross Domestic Product (GDP) is the total value of all final goods and services produced within a country in a given time period.

GDP is related to a nation's total income and spending because it measures the value of all goods and services produced, which in turn generates income for individuals and businesses, and drives spending in the economy.

The components of GDP are consumption, investment, government spending, and net exports (exports minus imports).

<p>GDP is corrected for inflation using a measure called the GDP deflator, which adjusts the nominal GDP for changes in prices over time.</p> Signup and view all the answers

<p>GDP does not directly measure society's well-being as it only focuses on economic output and does not account for factors such as income distribution, environmental impact, or the quality of life.</p> Signup and view all the answers