Gross Domestic Product
Definition
GDP. The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. The GDP report is released at 8:30 am EST on the last day of each quarter and reflects the previous quarter. Growth in GDP is what matters, and the U.S. GDP growth has historically averaged about 2.5-3% per year but with substantial deviations. Each initial GDP report will be revised twice before the final figure is settled upon: the "advance" report is followed by the "preliminary" report about a month later and a final report a month after that. Significant revisions to the advance number can cause additional ripples through the markets. The GDP numbers are reported in two forms: current dollar and constant dollar. Current dollar GDP is calculated using today's dollars and makes comparisons between time periods difficult because of the effects of inflation. Constant dollar GDP solves this problem by converting the current information into some standard era dollar, such as 1997 dollars. This process factors out the effects of inflation and allows easy comparisons between periods. It is important to differentiate Gross Domestic Product from Gross National Product (GNP). GDP includes only goods and services produced within the geographic boundaries of the U.S., regardless of the producer's nationality. GNP doesn't include goods and services produced by foreign producers, but does include goods and services produced by U.S. firms operating in foreign countries.
 Cite this definition
Related Terms
GNP, deflator, recovery
'Gross Domestic Product
' appears in the definitions of these other terms on BusinessDictionary.com gross value added (GVA), informal economy, macro forecast, potential output, aggregate demand, and 
Related Research Articles from the InvestorGuide.com University
Introduction to the EconomyLearn how the economy can be influenced by the US government through fiscal and monetary policy. Understand the importance of a global economy and why individuals should make a portion of their investments overseas. 
Economic IndicatorsFind out about some of the most researched pieces of news in the world. Topics include Gross Domestic Product, Consumer Price Index, the Producer Price Index, Employment Indicators, the Retail Sales Index, the National Association of Purchasing Management Index, the Consumer Confidence Index, and more.
Inflation and Interest RatesDiscover how inflation works and the affect it can have on the market. Also, learn about interest rates, what causes them to rise or drop, and why you should care.
Related Research Tool from InvestorGuide.com
Want to know what�s happening in the markets? Find the latest market news and data as well as details about the most actively traded stocks. Click here to get started. Featured Sponsor
|
