What does GDP measure?

GDP, or Gross Domestic Product, measures the total value of all goods and services produced within a country over a specific period, typically a year. This figure is a critical indicator of a country's economic performance and health, as it reflects the economic activity and productivity of the nation. When GDP increases, it generally indicates that the economy is doing well, with more goods and services being produced and consumed, leading to job creation and higher income levels.

The other options focus on different economic indicators. For instance, while national debt quantifies how much money a government owes, this does not provide a direct measure of current economic output like GDP does. The unemployment rate is an important metric for assessing the labor market and economic health but does not encompass the total economic output. Similarly, the inflation rate measures how much prices for goods and services rise over time, which, while connected to GDP, doesn't itself reflect the total production and output of the economy. Thus, GDP serves as the primary measure of overall economic activity, setting it apart from these other elements.