þjóðarframleiðslu

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 year or a quarter. It serves as a primary measure of a nation's economic size and performance.

GDP can be calculated using three main 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 measures the value added at each stage of production, from raw materials to final products.

Nominal GDP is calculated using current prices, while real GDP adjusts for inflation, providing a more accurate picture of actual economic growth. Per capita GDP, which divides total GDP by the population, is often used to compare living standards between countries.

While a widely used metric, GDP has limitations. It does not account for non-market activities, income inequality, environmental degradation, or the underground economy. Despite these shortcomings, GDP remains an essential tool for policymakers, economists, and investors to understand economic trends and make informed decisions.