GDP, or Gross Domestic Product, is:

• A. the total value of all final goods and services produced in the economy during a given year.
• B. the total value of all intermediate goods and services produced in the economy during a given year.
• C. the total value of all final goods and services produced by the government
• D. the sum of all incomes earned in a year

Answer: (A)

GDP measures the market value of all final goods and services produced within a country in a given period, usually a year. This definition is about final goods to avoid double counting—if we counted intermediate goods too, the same production would be counted multiple times as inputs become outputs, overstating the economy’s size. By focusing on final goods, GDP captures only the end value of what is actually sold to final buyers.

The scope “within a country’s borders” and the time frame “during a given year” are also essential: it includes production by all sectors inside the country (private, public, foreign-owned) and sums it over the year. That’s why this statement best matches the standard measure of GDP.

As for the other ideas: counting intermediate goods would inflate the figure, since they’re inputs used to produce final goods. Limiting to government production misses the large productive activity in the private sector. Summing incomes is related through the income approach, but GDP is defined as production (though, in theory, incomes should align with that production).