Gross Domestic Product (GDP)
The market value of all final goods and services produced within a country in a given period of time.
(Peter Dungan, Toronto PPG 1003H)
Economists use two different methods to estimate GDP, the “income” estimate and the “expenditure” estimate. The income estimate of the Gross Domestic Product for a jurisdiction is created by adding up the total “income” earned by people and firms in the jurisdiction over a particular period of time, usually a year. Some of the major components of the income estimate of GDP are: wages and salaries, corporate profits, and investment income.
The “expenditure” estimate for Gross Domestic Product is arrived at by adding up all spending on final demand in the economy. The major components of the expenditure estimate are: household consumption, business investment, government spending on goods and services and net exports.