What is GDP?

Definition of GDP: GDP stands for Gross Domestic product. It is described as a measure of the economic performance of a company and includes the total cost of the output of a country that comprises of different goods and services that are created within the physical borders of the country. Unlike the GDP, it excludes the gains produced by the domestic firms in foreign countries and the distribution of reinvested money in several domestic firms that handle operation that are foreign based. In the year 1991, US started utilizing GNP as its main production measure. Gross Domestic Product can be decided in three different ways. Theoretically, every method should create same kind of results. The different methods are the approach of the products, approach of the income and approach of the expenditure. The approach to the product is regarded as the best among three of them. It makes the outputs of each enterprise class to calculate the total. The spending approach assumes that someone must purchase the whole inventory of the produced products and thus, the cost of the product must be same with the expenditure of people.