What is Gross Domestic Product (GDP)?

Gross Domestic Product (GDP) is defined as the total value of all final goods and services produced within a country's borders during a specific time period, typically measured annually or quarterly. This definition captures the economic output of a nation, providing insight into the health and size of its economy.

Focusing on the specifics, GDP includes all elements that contribute to production domestically, which ensures that the measure reflects the economic activities that take place within the defined geographic boundaries of a country, irrespective of whether the producers are domestic or foreign entities. It encompasses consumption, investment, government spending, and net exports (exports minus imports), providing a comprehensive view of economic activity.

The other options present definitions that do not accurately describe GDP. The total value of all goods and services produced globally refers to Gross World Product, while total revenue generated by businesses pertains more closely to business income rather than comprehensive economic activity. The overall value of investments made by foreign companies in a country relates to foreign direct investment (FDI) and does not include the production of goods and services, which are central to GDP's definition. Thus, the first choice encapsulates the core concept of GDP as an essential indicator of economic performance.