What is GDP in financial terms?

Financial Definition of GDP. What It Is. Gross Domestic Product (GDP) is the broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time. How It Works.

Does GDP measure population growth?

For example, GDP doesn’t measure population growth. If GDP in the UK rose 2%, but the population grew 4%, the average income per person would actually have fallen, the Bank of England explains. There are also things that inflate GDP, but don’t make the country more prosperous.

When was GDP first used?

The modern concept of GDP was first developed by Simon Kuznets for a 1934 U.S. Congress report, where he warned against its use as a measure of welfare (see below under limitations and criticisms ). After the Bretton Woods conference in 1944, GDP became the main tool for measuring a country's economy.