How gdp is calculated?

Gross Domestic Product (GDP) is a measure of the economic activity of a country or region. It is calculated by summing up the value of all goods and services produced within a given period of time, typically a year. GDP can be calculated in three different ways:

The production approach: This method calculates GDP by adding up the value of all goods and services produced within a given period of time. This includes everything from agriculture and mining to manufacturing and services.

The income approach: This method calculates GDP by adding up the total income earned by all factors of production within a given period of time. This includes wages, rent, interest, and profits.

The expenditure approach: This method calculates GDP by adding up all the spending on final goods and services within a given period of time. This includes consumer spending, investment, government spending, and net exports (exports minus imports).

All three methods should theoretically yield the same GDP figure, and are used to cross-check and validate each other. GDP is often used as a broad measure of a country's economic health and progress. It is also used to compare the economic performance of different countries.

It's worth noting that GDP is a measure of economic activity and does not take into account other important factors such as the distribution of wealth, quality of life, or environmental sustainability. Therefore, GDP should be used in conjunction with other indicators to gain a more comprehensive understanding of a country's economic and social well-being.