GDP Calculator
Calculate Gross Domestic Product (GDP) using Expenditure or Income approaches. Adjust for inflation with the Real GDP calculator or track economic growth rates.
Expenditure Approach
Formula: C + I + G + (X - M)
What is GDP?
Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a country's borders in a specific time period. It is a comprehensive scorecard of a country's economic health.
Expenditure Method
The most common way to calculate GDP is by summing up everyone's spending.GDP = C + I + G + (X - M)
- Consumption (C): Private spending by households (food, rent, medical).
- Investment (I): Business spending on capital (machinery, software).
- Government (G): Spending on public services and defense.
- Net Exports (X-M): Exports minus Imports.
Income Method
This approach calculates GDP by adding up all incomes received by factors of production in the economy.GDP = Wages + Rent + Interest + Profit
Technically, adjustments like indirect taxes and depreciation are added to move from Net National Income to Gross Domestic Product.
Real vs. Nominal GDP
Nominal GDP is calculated using current prices and doesn't account for inflation.Real GDP is adjusted for inflation (using a GDP Deflator) to reflect true economic growth.
? Frequently Asked Questions
No. GDP only measures the production of new goods and services. Buying a used car or an existing house transfers ownership but does not generate new output.
GDP measures production within a country's borders, regardless of who owns the factories. GNP (Gross National Product) measures production by a country's citizens, regardless of where they are located.
Imports are subtracted because they represent spending on goods produced in other countries. Since 'Consumption' includes spending on both domestic and imported goods, we must subtract the imported portion to capture only domestic production.