Gross Domestic Product
GROSS DOMESTIC PRODUCT
Gross Domestic Product, or GDP, represents the total output of goods and services produced by a nation. In the United States for example, GDP includes all the corn and wheat grown by farmers, all the movies filmed in Hollywood, all the automobiles built in Detroit, all the meals served in restaurants, all the money spent on school books; in other words, every item produced for sale in the United States is represented by the GDP. Obviously millions of products and services go into the GDP of a modern industrial economy. Government economists keep track of output and release a measure of the GDP four times a year. These figures try to capture the amount that the economy is growing or shrinking. For example the government may report that the economy grew three percent in a given year. When the GDP figure is rising, the nation is in a positive economic upswing. In such times, more workers are being hired, and paychecks are getting bigger. But when the GDP begins to shrink, it means the nation is entering a recession. More people lose their jobs, and families have to tighten their belts. In general GDP growth in the range of three to five percent a year in the United States is considered healthy; growth of one or two percent a year is considered slow; and any decline in GDP is considered cause for alarm.
See also: Gross National Product