What does Gross Domestic Product (GDP) represent?

Gross Domestic Product (GDP) represents the money value of goods and services produced by an economy within a specified period, typically a year or a quarter. It serves as a comprehensive measure of a nation’s overall economic activity and performance.

GDP includes the total market value of all final goods and services produced within a country’s borders, accounting for consumption, investments, government spending, and net exports (exports minus imports). This indicator is crucial because it provides insight into the size and health of an economy, indicating whether it is growing or shrinking, and influences government policy, business investment, and economic planning.

The other options do not accurately describe GDP. Investments by foreign nations relate to foreign direct investment rather than the domestic production of goods and services. Income from rental properties pertains to real estate income and is not reflective of the nationwide economic output. Additionally, the combined wealth of all citizens focuses on wealth distribution rather than the overall production capabilities of the economy. Thus, option B is the most accurate and comprehensive representation of what GDP signifies in an economic context.