gross domestic product

noun

Definition of gross domestic product

: the gross national product excluding the value of net income earned abroad

Examples of gross domestic product in a Sentence

Recent Examples on the Web

The effort to study well-being grew out of concerns about the limitations of gross domestic product to measure growth. — The Christian Science Monitor, "Generation gap in the presidential race?," 1 Aug. 2019 The Department of Commerce's initial estimate of gross domestic product -- the total value of goods and services produced in the U.S. -- may reinforce concerns that economic activity is slowing amid a trade war and other global economic headwinds. — Aimee Picchi, CBS News, "U.S. economy grows at 2.1%, cooling off from first quarter," 26 July 2019 Total federal and state social spending as a share of gross domestic product soared from 6.8 percent in 1970 to 14.3 percent in 2018. — Chris Edwards, National Review, "How the Government Creates Wealth Inequality," 19 Aug. 2019 Vietnam has become the largest beneficiary of the trade war in the 12-month period that began in the first quarter of 2018, gaining 7.9% of gross domestic product from trade diversion, Nomura said in a June 3 note. — Debby Wubloomberg, Los Angeles Times, "Trump trade war is splitting tech manufacturers along U.S.-China lines," 15 Aug. 2019 In January, the World Economic Forum predicted the trade war could reduce global gross domestic product growth by 0.7 percentage points to 2.8 percent in 2019. — Taylor Telford, oregonlive.com, "Trump backpedals on China threats as trade deal shows signs of slipping away," 30 July 2019 Barack Obama won re-election with Election Day unemployment at 7.7% and gross domestic product growth an anemic 0.5%. — Shannon Pettypiece, Fortune, "Trump Should Be a Shoo-in for 2020, But Low Approval Holds Him Back," 18 June 2019 The government on Thursday revised down gross domestic product growth to 2.2 percent in the fourth quarter. — Martin Crutsinger, The Seattle Times, "US consumer spending edges up weak 0.1 percent in January," 29 Mar. 2019 When Brazilian generals took over in 1964, inflation was at 90 percent and gross domestic product growth at 3 percent, according to central bank figures. — Fox News, "Many Brazilians look to military amid anger at politicians," 22 June 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'gross domestic product.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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More Definitions for gross domestic product

gross domestic product

noun

Financial Definition of gross domestic product

What It Is

Gross Domestic Product (GDP) is the broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time.

How It Works

The Department of Commerce releases GDP data for the U.S. economy on a quarterly basis at 8:30 am EST on the last business day of the next quarter.

The equation used to calculate GDP is as follows:

GDP = Consumption + Government Expenditures + Investment + Exports - Imports

The components used to calculate GDP include:

Consumption:
Durable goods (items expected to last more than three years)
Nondurable goods (food and clothing)
Services

Government Expenditures:
Defense
Roads
Schools

Investment Spending:
Nonresidential (spending on plants and equipment), Residential (single-family and multi-family homes)
Business inventories

Net Exports:
Exports are added to GDP
Imports are deducted from GDP

The GDP report also includes information regarding inflation:
The implicit price deflator measures changes in prices and spending patterns.
The fixed-weight price deflator measures price changes for a fixed basket of over 5,000 goods and services.

GDP is calculated both in current dollars and in constant dollars. Current Dollar GDP involves calculating economic activity in present-day dollars. This, however, makes time period comparisons difficult due to the effects of inflation. By comparison, Constant Dollar GDP factors out the impact of inflation and allows for easy comparisons by converting the value of the dollar in other time periods to present-day dollars.

Why It Matters

When GDP declines for two consecutive quarters or more, by definition the economy is in a recession. Meanwhile, when GDP grows too quickly and fears of inflation arise, the Federal Reserve often attempts to stimulate the economy by raising interest rates.

Source: Investing Answers

gross domestic product

noun

English Language Learners Definition of gross domestic product

: the total value of the goods and services produced by the people of a nation during a year not including the value of income earned in foreign countries

See the full definition for gross domestic product in the English Language Learners Dictionary

gross domestic product

Definition of gross domestic product

Examples of gross domestic product in a Sentence

First Known Use of gross domestic product

Financial Definition of gross domestic product

English Language Learners Definition of gross domestic product

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