Gross Domestic Product (GDP) is a measure of the total economic output of a country. It represents the monetary value of all final goods and services produced within a country's borders during a specified period, typically a year.

• The most common method for calculating GDP is the expenditure approach.
• This method involves four components: consumption, investment, government spending, and net exports.
• The formula for GDP using the expenditure approach is:
GDP = C + I + G + NX
• C represents household consumption of goods and services.
• I represents business investment in capital goods.
• G represents government spending on goods and services.
• NX represents the net exports of goods and services.
• For example, if a country has a GDP of $10 trillion, and its consumption is $6 trillion, its investment is $2 trillion, its government spending is $1.5 trillion, and its net exports are -$0.5 trillion, the calculation would be as follows:
$10 trillion = $6 trillion (consumption) + $2 trillion (investment) + $1.5 trillion (government spending) - $0.5 trillion (net exports).
• This means that $10 trillion worth of goods and services were produced and purchased in the country during the specified period.

Overall, GDP is an important indicator of a country's economic performance and is used by governments, businesses, and investors to make informed decisions about policies and investments.