Definition
Gross Domestic Product (GDP) measures the total monetary value of all finished goods and services produced within a country's borders in a specific time period. It's the most comprehensive indicator of economic output and health. GDP can be calculated via expenditure (consumption + investment + government spending + net exports), income (total income earned by residents), or production methods. Real GDP adjusts for inflation, providing better period-to-period comparisons. GDP growth is closely watched by investors as it influences corporate earnings and monetary policy.
Formula
Example
If US GDP grows 3% in a quarter, it suggests a healthy economy, likely benefiting corporate earnings and stocks. Negative GDP growth for two consecutive quarters technically defines a recession.
FAQ
What is Gross Domestic Product (GDP)?
The total value of all goods and services produced within a country during a specific period.
How do you calculate Gross Domestic Product (GDP)?
A common formula for Gross Domestic Product (GDP) is: GDP = C + I + G + (X - M) 其中 C = 消费支出，I = 投资，G = 政府支出，X = 出口，M = 进口
Why is Gross Domestic Product (GDP) important?
Gross Domestic Product (GDP) helps investors evaluate macroeconomic and make more informed decisions.