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

Second-quarter gross domestic product figures are due Aug. 14. — Washington Post, "German exports a bit lower in June, add to economic clouds," 10 Aug. 2019 More than half its gross domestic product is exported. — Los Angeles Times, "U.S. envoy warns Germany: Pay more or risk losing protection," 9 Aug. 2019 It's helped the city of over 7 million become an economic powerhouse, and Hong Kong's gross domestic product has doubled since 1997. — Doug Criss, CNN, "The unique reasons why millions in Hong Kong are protesting," 1 July 2019 In large part due to the foreign aid influx, its gross domestic product ballooned from $748 million in 2003 to $3.3 billion in 2017, with per-capita GDP of about $600. — Jessica Eise, Quartz Africa, "How foreign aid helped and hurt one of the world’s poorest countries," 21 June 2019 In that instance, a step-up in growth of gross domestic product on the back of President Trump’s tax cuts was supported by an expansion in the labor force and bigger gains in productivity. — Los Angeles Times, "Fed’s Powell risks inflation to push economic benefits for those at the bottom," 30 July 2019 The gross domestic product, the economy’s total output of goods and services, grew at a 2.1% annual rate last quarter, down from a 3.1% gain in the first quarter, the Commerce Department estimated Friday. — Martin Crutsinger, Twin Cities, "US economy slowed to 2.1% growth rate in second quarter," 26 July 2019 The country's gross domestic product grew at 6.2% in the second quarter, its slowest rate in nearly three decades and lower than the 6.4% recorded last quarter, according to government figures released on Monday. — Laura He, CNN, "China's economy slumps as trade war hits," 15 July 2019 The civil wars slashed the size of Liberia’s economy by 90%, causing its gross domestic product, or GDP, to decline to only $54.50 per capita by 1995. — Jessica Eise, Quartz Africa, "How foreign aid helped and hurt one of the world’s poorest countries," 21 June 2019

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

16 Aug 2019

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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