GDP stands for gross domestic product and is the market value of all officially recognised final goods and services produced in a country over a set period of time.
It can be determined in a number of ways, all of which should come to the same result.
The main ones are the income approach, expenditure approach and output approach.
The income approach means that all production factors must be of equal value to their product and determines GDP by finding the sum of all producers’ incomes.
The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people’s total expenditures in buying things.
The product approach, adds up the outputs of every class of enterprise to arrive at the total.
GDP affects the worlds currencies by influencing the value of goods and services produced in an economic area.