Þjóðarframleiðsla

Þjóðarframleiðsla, or Gross Domestic Product (GDP), is a fundamental macroeconomic indicator representing the total monetary value of all the finished goods and services produced within a country's borders during a specific period, typically a quarter or a year. It serves as a primary measure of a nation's economic size and health.

GDP can be calculated using three primary approaches: the expenditure approach, the income approach, and the production (or value-added) approach. The expenditure approach sums up all spending on final goods and services by households, businesses, government, and net exports. The income approach aggregates all incomes earned by factors of production, such as wages, profits, and rent. The production approach calculates the sum of value added at each stage of production across all industries.

While GDP is a widely used metric, it has limitations. It does not account for income inequality, environmental degradation, or the underground economy. Furthermore, GDP per capita, which divides total GDP by the population, is often used to provide a per-person average of economic output, offering insights into living standards, though it too has its shortcomings in capturing overall well-being. Changes in GDP over time are crucial for understanding economic growth or contraction, influencing policy decisions and international comparisons.