Final answer:
GDP is an economic indicator that measures the market value of all final goods and services produced within a country in a specific time period. It is a comprehensive representation of economic activity excluding old goods and double counting. The correct option that GDP measures is D) market value of final goods and services produced in the economy in a given time period.
Step-by-step explanation:
The Gross Domestic Product (GDP) of a country is a fundamental economic measure that represents the market value of all final goods and services produced within a nation during a specific time period, typically a year. Final goods refer to items that are at their furthest stage of production at year's end and do not include intermediate goods to prevent double counting. When calculating GDP, it is vital to account only for these final goods and services, to ensure the numbers accurately reflect true production without overestimation.
Considering the provided options for what GDP measures, it is apparent that GDP does not simply tally the number of goods and services but rather assesses the market value of these goods and services. Additionally, GDP does not include old goods, only the new output within the specified time frame. Thus, used goods and transactions of goods produced in previous years are excluded from current GDP calculations, as their inclusion would not accurately represent the economic activity of the current period.
Therefore, the correct answer to what GDP measures is D) market value of final goods and services produced in the economy in a given time period. This encapsulates the essence of GDP as an economic indicator used to gauge the size and health of an economy, as it reflects both the quantity and price of the goods and services produced domestically.