Understanding GDP and Economic Growth

Every single dollar you spend is being tracked to measure the heartbeat of the entire nation.

It is called GDP, or Gross Domestic Product, and it is basically the total price

tag of everything produced inside the country's borders. Whether you buy a haircut or a new

car, if it is a final product, it counts towards the score.

We ignore the raw materials to avoid double counting. It is just the sum of spending by households,

businesses, the government, and exports. But remember, a higher GDP only

matters if we actually produce more stuff, not just when prices go up. That is the difference

between getting richer and just getting inflation.