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

My government increased Australia’s defense spending from a historical low of 1.6% of gross domestic product to 2%. — Tony Abbott, WSJ, "An Ally Sizes Up Donald Trump," 13 July 2018 Blue Cross, now part of Anthem, was the dominant health insurer at the time, and health care accounted for 8.9% of the gross domestic product, compared with about 18% now. — Guy Boulton, Milwaukee Journal Sentinel, "Mueller QAAS promises transparency on commissions — and the option of no commissions at all," 26 Jan. 2018 French President Emmanuel Macron quickly disputed Trump's claim that NATO allies had agreed to boost defense spending beyond their existing goal of 2 percent of gross domestic product by 2024. — Jonathan Lemire And Jill Colvin, Fox News, "Trump brings his chaotic road show to Britain," 13 July 2018 Australia will ramp up its defense spending to 2 percent of gross domestic product by 2020, a year earlier than had initially been promised, Pyne said. — Rod Mcguirk, The Seattle Times, "Australia to buy 6 US-made Triton drones for $5.1 billion," 25 June 2018 Much has been made of the alliance's goal that member nations spend at least 2 percent of gross domestic product on defense, due to U.S. President Donald Trump's regular contention that members are shirking their commitments. — David Rising, Fox News, "A look at NATO and what the alliance does, past and present," 13 July 2018 The overall hit to the U.S. economy is relatively small and uncertain, perhaps about 0.3-0.4 percent of gross domestic product. — Jonathan Chait, Daily Intelligencer, "Paul Ryan Unaware Constitution Lets Congress Override Presidential Veto," 12 July 2018 But in 2016, the last year for which there are complete data, the United States spent $3.3 trillion, or almost 17.9 percent of its gross domestic product, on health care. — Vijay Govindarajan, STAT, "What India can teach the U.S. about driving down the cost of health care," 10 July 2018 Its annual gross domestic product, per person, is less than $400, according to the World Bank. — New York Times, "Boris Becker Is an African Diplomat? His Creditors Are First to Know," 15 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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Statistics for gross domestic product

Last Updated

13 Sep 2018

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The first known use of gross domestic product was in 1951

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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