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 Germany and Spain are proposing some of the most aggressive measures, with stimulus efforts of around 16% of gross domestic product. John Detrixhe, Quartz, "Investors are bracing for an epidemic of government borrowing," 18 Mar. 2020 For instance, South Africa, which fell into its second recession in two years, relies on its tourism industry for 9.2% of jobs in the country and 8.2% of gross domestic product. Yomi Kazeem, Quartz Africa, "Africa is starting to lock out the world to slow the spread of coronavirus on the continent," 16 Mar. 2020 Since banks freely doled out credit for mortgages, auto loans and credit cards, household debt climbed to a record 134% of gross domestic product, according to Oxford Economics and the Federal Reserve. Paul Davidson, USA TODAY, "It may feel like 2008 all over again, but here's how the coronavirus crisis is different," 11 Mar. 2020 In Italy, tourism and its related industries amount to 13% of gross domestic product. Washington Post, "AP PHOTOS: Venice a shell of itself as tourists flee virus," 5 Mar. 2020 As a result, the budget deficit in the year through March will widen to 3.8% of gross domestic product from a planned 3.3%. Anirban Nag, Bloomberg.com, "Modi’s Budget Falls Short as Focus Shifts to RBI Meeting," 1 Feb. 2020 Consumer spending is responsible for about 70% of gross domestic product and has held up as other areas, such as business spending, have weakened. Steve Matthews, Fortune, "How will coronavirus impact the economy? Here are 5 early-warning indicators," 10 Mar. 2020 In 1960, health care consumed about 5 percent of gross domestic product. Robin Kaiser-schatzlein, The New Republic, "Why Deaths of Despair Are Rising," 10 Mar. 2020 The allies agreed then to halt cuts, boost budgets and move toward spending 2% of gross domestic product on defense by 2024. Washington Post, "Defense budgets set to dominate yet another NATO summit," 2 Dec. 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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First Known Use of gross domestic product

1951, in the meaning defined above

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Time Traveler for gross domestic product

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The first known use of gross domestic product was in 1951

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Statistics for gross domestic product

Last Updated

28 Mar 2020

Cite this Entry

“Gross domestic product.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/gross%20domestic%20product. Accessed 28 Mar. 2020.

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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

More from Merriam-Webster on gross domestic product

Britannica.com: Encyclopedia article about gross domestic product

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