The Gross Domestic Product (GDP) is a macro-economic indicator that determines the monetary value of all the goods and services produced or rendered within a country's border. It is a report released to rate the output of production of a country within a specific time period. But the cost parallel to its production is not included.
An ideal GDP growth rate is around 2.5-3% per year because of its sustainability. A tendency to overheat arises when the growth rate exceeds the ideal which may result to a high inflation. But this seldom happen because governments usually took preliminary caution by wheeling the GDP back to its track. On the other hand, a growth below the ideal rate is an indication that the country is on a slow pace and may induce lower spending and increase in the unemployment rate.
The annual report materializes in to two forms: Current and Constant dollar.
The Current dollar is the most recent calculation of the GDP and is calculated using the dollar of the day that would allow comparison between periods.
The Constant dollar translates the current information into some standard and eliminates the effect of inflation that allows smooth comparison between time periods.
GNP is often mistaken as GDP. The two terms differ from each other in terms of boundaries. GDP only denotes the goods within the territory while the GNP includes even those outside the country's borders.
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