What does Gross Domestic Product (GDP) measure?

Gross Domestic Product (GDP) is a comprehensive measure of a country's economic performance, specifically reflecting the total market value of all final goods and services produced within that country's borders during a given time period, usually a year or a quarter. This definition encompasses a wide array of products and services, ensuring that it captures the economic activity that directly contributes to the nation's economy.

Measuring GDP in this manner allows economists to gauge the overall health of the economy, as it provides insights into production levels, consumption, and investment. This metric is central to macroeconomic analysis because it illustrates how well an economy is performing, highlighting trends over time, and facilitating comparisons between different economies.

In contrast, the other options represent different economic measures or concepts. The second choice pertains to Gross National Product (GNP), which focuses on income earned by residents, while the third choice relates to equity markets and does not reflect economic production directly. The last option regarding the value of exports only addresses a specific segment of economic activity and does not account for overall production within the economy. Therefore, the correct understanding of GDP as the total market value of all final goods and services is crucial for grasping the broader scope of economic indicators.