Gross Domestic Product

In order to avoid double-counting, we count only production for final demand. Accordingly, we define

Gross Domestic Product

The market value of all production for final demand within a given country for a given period.

Production for final demand means production of goods and services that will not be used for further production in the same country and during the same time period. Thus, spending by households for the goods they will use at home is final demand -- the good the household buys will not be used to produce other goods and services at all. Similarly, investment by businesses is part of final demand, in so far as the investment goods are durable and will not be used up within the same time period. Following out this logic, production for final demand, Gross Domestic Product, has just four components:

• Consumption expenditure.
• Investment expenditure.
• Government expenditure.
• Net Exports.