Benefits And Disadvantages Of Gross Domestic Product Essay

1251 Words Oct 21st, 2016 6 Pages
Gross Domestic Product, otherwise known as GDP, is a simplified measurement of how much stuff a country produces and can be calculated using a simple equation that will be discussed later in the essay. There are two types of GDP, one is nominal and one is real, and each one has distinct differences. Once the GDP is calculated, that information can be taken and used to calculate GDP per capita. This measurement is extremely helpful in determining a country 's economic well-being but not necessarily the country’s happiness which means that there are benefits and disadvantages to using it. When looking at GDP, it is important to note all of these details about it and how they all interrelate. First, let’s go over the basics. What is GDP? GDP as explained by the website Investing Answers 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” (Investing Answers, n.d.) Essentially what that means is that it is a measurement of how much stuff a country produces domestically in one year. It is important to note that it is a measurement over one year because the numbers can be construed if the information is gathered after six months or two years. Things that are included in GDP are things such as cars, computers, tools, and basically anything else that is productive,…

Related Documents