What does Gross Domestic Product measure?

• A. The total value of foreign investments
• B. The total value of all goods and services produced in a country in a given year
• C. The total population of a country
• D. The total area of land within a country

Answer: (B)

Gross Domestic Product (GDP) measures the total value of all goods and services produced within a country's borders in a specific time period, typically a year. This encompasses all economic activity, including consumption, investment, government spending, and net exports (exports minus imports). By quantifying the economic performance of a country, GDP serves as a vital indicator of a nation's economic health and the standard of living of its citizens. It is used widely in economic analysis to gauge growth, compare economic productivity, and guide policy decisions.

The other options do not align with the definition of GDP. Foreign investments pertain to financial inflows from outside the country rather than domestic production; the population of a country is measured by demographics, while land area is a geographical statistic unrelated to economic output. Thus, the option that describes GDP correctly focuses on the total value of goods and services produced domestically.