gross domestic product

(noun)

A measure of the economic production of a particular territory in financial capital terms over a specific time period.

Related Terms

Examples of gross domestic product in the following topics:

  • Chapter Questions

    • Please define the following terms: inflation, gross domestic product, and interest rates.

  • Macroeconomic Factors Influencing the Interest Rate

    • According to Taylor's original version of the rule, the nominal interest rate should respond to divergences of actual inflation rates from target inflation rates and of actual Gross Domestic Product (GDP) from potential GDP:

  • Disinflation

    • Disinflation is a decrease in the rate of inflation–a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time.

  • Other Types of Bonds

    • For example equity-linked notes and bonds indexed on a business indicator (income, added value) or on a country's gross domestic product (GDP).
    • Some companies, banks, governments, and other sovereign entities may decide to issue bonds in foreign currencies because it may appear to be more stable and predictable than their domestic currency.

  • Central Banks

    • Variable 2: A business cycle means the economy is experiencing strong economic growth, and economists measure the size of the economy by the Gross Domestic Product (GDP).
    • When businesses boost production, they produce more goods and services within the economy.
    • People borrow money to buy cars, houses, appliances, and computers while businesses borrow to build factories and to invest in machines and equipment, expanding production.

  • Profit Margin

    • Recall that gross profit is simply the revenue minus the cost of goods sold (COGS).
    • Net profit is the gross profit minus all other expenses.
    • The gross profit margin calculation uses gross profit and the net profit margin calculation uses net profit .
    • Companies need to have a positive profit margin in order to earn income, although having a negative profit margin may be advantageous in some instances (e.g. intentionally selling a new product below cost in order to gain market share).
    • The percentage of net profit (gross profit minus all other expenses) earned on a company's sales.

  • Recording Sales

    • Net sales are gross sales minus sales returns, sales allowances, and sales discounts.
    • From an accounting standpoint, sales do not occur until the product is delivered.
    • Gross sales are the sum of all sales during a time period.
    • Gross sales do not normally appear on an income statement.
    • Net sales are operating revenues earned by a company for selling its products or rendering its services.

  • Sales Forecast Input

    • Net sales are operating revenues earned by a company for selling its products or rendering its services.
    • For financial ratios that use income statement sales values, "sales" refers to net sales, not gross sales.
    • Gross sales are the sum of all sales during a time period.
    • Net sales are gross sales minus sales returns, sales allowances, and sales discounts.
    • Gross sales do not normally appear on an income statement.

  • Overview of Merchandising Operations

    • Merchandising is any practice which contributes to the sale of products to a retail consumer.
    • In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer.
    • At a retail in-store level, merchandising refers to the variety of products available for sale and how the products are displayed to stimulate interest and entice customers to make a purchase.
    • This includes disciplines and discounting, physical presentation of products and displays, and decisions about which products should be presented to which customers at what time.This annual cycle of merchandising differs between countries and some times within them.
    • Merchandising is any practice which contributes to the sale of products to a retail consumer.

  • Income Statements

    • The Multi-Step income statement (as the name implies) takes several steps to find the bottom line, starting with the gross profit.
    • It then calculates operating expenses and, when deducted from the gross profit, yields income from operations.
    • Every time a business sells a product or performs a service, it obtains revenue.
    • This often is referred to as gross revenue or sales revenue.
    • SGA is usually understood as a major portion of non-production related costs, in contrast to production costs such as direct labour.