Which of the following best describes Gross Domestic Product (GDP)?

• A. The total amount of money in circulation within a country's economy.
• B. The sum of all government spending and investment in a country.
• C. The total market value of all final goods and services produced within a country's borders in a given period.
• D. The total value of all goods and services produced by a country's citizens, regardless of location.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand that Gross Domestic Product (GDP) measures economic activity within a country's borders during a specific time period, usually a year or a quarter.
2. Step 2: Recognize that GDP includes the market value of all final goods and services produced domestically, meaning it excludes intermediate goods to avoid double counting.
3. Step 3: Differentiate GDP from other related concepts, such as Gross National Product (GNP), which accounts for goods and services produced by a country's citizens regardless of location.
4. Step 4: Note that GDP does not measure the total amount of money circulating in the economy or just government spending and investment; it encompasses all final production by all sectors.
5. Step 5: Conclude that the best description of GDP is the total market value of all final goods and services produced within a country's borders in a given period.