Curious Cat Investing Dictionary: Gross Domestic Product (GDP)

Gross Domestic Product (GDP) - A measure of total economic activity within a country. GDP attempts to measure the gross added value of all products and services. So, for example, if a factory in Spain was owned by an USA company the output of that factory would be included in the GDP of Spain. In addition, if a citizen of the USA worked in China that work would be included in the GDP of the China.
Often GDP per capita (the amount of economic activity for each person within a country) is used to compare economies of countries. Countries do not all compute GDP in the same way and the variaiton between the accuracy of countries is wide (in general the politics involved result in a desire to show GDP incresing as much as possible).
The USA switched to using the GDP as the primary measure of economic performance from GNP in 1991 (now most all countries use GDP).

• Gross National Product (GNP) - A measure of total economic activity of the assets of a country. So, for example, if an USA company owned a factory in Spain, the output of that factory would be included in the GNP for USA. In addition, if a citizen of the USA worked in China that work would be included in the GNP for the USA.
• Real GDP - GDP adjusted for inflation. When comparing GDP, or GNP, the real GDP is used.
• Nominal GDP - GNP not adjusted for inflation.
• Gross Domestic Income - a measure of GDP from the income perspective. It should equal the GDP in theory but is usally off a bit (due to measurement error found in real economic data).

• United States Bureau of Economic Analysis

Curious Cat Investing Library
Dictionary: PE ratio, Dollar Cost Averaging , Balance Sheet
Topics: China - Economics - Real Estate - Trading
Great Investors Focus: Darvas - Livermore - O'Neil - Soros
Authors: Levitt - Schwager Investment Bookstore