Gross domestic product refers to the market value of all final goods and services produced in a country over a specific time period, usually one year; government transfers and goods/services without market value are not included.
There are two approaches to calculate GDP:
The expenditures approach can also be stated as:
GDP = C + I + G + (X – M)
C = consumption spending,
I = business investments (includes capital equipment and inventories),
G = government purchases,
X = exports,
M = imports
Theoretically, the GDP derived from the two methods should match. Practically, there are some discrepancies due to measurement issues.