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

In May, the deficit rose to its highest level in 5½ years, reaching 3.8% of gross domestic product, or $765 billion, over the prior 12-month period. Nick Timiraos, WSJ, "Kudlow Says White House Hopes Fed Will Raise Rates ‘Very Slowly’," 29 June 2018 To find out, researchers used historical data to calculate how much a change in temperature affected gross domestic product, or GDP, the total value of goods and services a country produces in a year. Amina Khan, latimes.com, "By getting serious about limiting global warming, the world could save itself more than $20 trillion," 23 May 2018 For the duration of this economic expansion, consumer spending has been the dynamo driving growth in gross domestic product, or GDP. Andrew Van Dam, Anchorage Daily News, "Americans are saving at the lowest rates since the housing bubble. That’s a big red flag for the economy.," 27 Jan. 2018 The overall economy, as measured by the gross domestic product, slowed to a lackluster annual growth rate of just 2 percent in the first three months of the year. Martin Crutsinger, USA TODAY, "US consumer spending weak in May, while inflation speeds up," 29 June 2018 For example, per-person gross domestic product adjusted for inflation is at its highest level on record, as are other similar measures of output. Neil Irwin, New York Times, "How Good Is the Trump Economy, Really?," 9 June 2018 In March, the Penn Wharton Budget Model forecast a cut in gross domestic product of 0.9 percent by 2027 and by 5.3 percent by 2040. Laurent Belsie, The Christian Science Monitor, "Tough talk or a trade war? Many US firms frozen in suspense.," 29 June 2018 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

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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Last Updated

8 Nov 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

More from Merriam-Webster on gross domestic product

Britannica.com: Encyclopedia article about gross domestic product

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