TeachMeFinance.com - explain Gross domestic product (GDP)
Gross domestic product (GDP) The term 'Gross domestic product (GDP) ' as it applies to the area of agriculture can be defined as ' Gross domestic product is a measure of the total production and consumption of goods and services in the United States. The Bureau of Economic Analysis constructs two complementary measures of GDP, one based on income and one based on expenditures. It is measured on the product side by adding up the labor, capital, and tax costs of producing the output. On the expenditure side, GDP is measured by adding up expenditures by households, businesses, government and net foreign purchases. Theoretically, these two measures should be equal. However, due to problems collecting data, there is often a discrepancy between the two measures. The GDP price deflator is used to convert output measured at current prices into constant-dollar GDP'.
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