Gross Domestic Product (GDP)

Gross domestic product (GDP) is a measure of the size of an economy. It is defined as “an aggregate measure of production equal to the sum of the gross values added of all resident, institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs)” by the OECD.

GDP estimates are commonly used to measure the economic performance of a whole country or region, but can also measure the relative contribution of an industry sector. This is possible because GDP is a measure of ‘value added’ rather than sales; it adds each firm’s value added (the value of its output minus the value of goods that are used up in producing it).

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