Question

What is GDP, and how is it useful?

Answer 1

GDP (gross domestic product) measures the total market value (gross) of all U.S. (domestic) goods and services produced (product) in a given year.

Policymakers, government officials, businesses, economists and the public alike rely on GDP and related statistics to help assess the economy’s well-being and to make informed decisions.

(Policymakers will look to GDP when contemplating decisions on interest rates, tax and trade policies.

The pace at which our economy is growing affects business conditions and investment decisions, as well as whether workers can find jobs.

State and local governments rely on GDP and similar statistics to help shape policy or decide how much public spending is affordable.

Economists study GDP and related statistics to help inform their research.)