Final answer:
GDP is the total value of all final goods and services produced in a nation within a year, avoiding double counting by focusing only on final goods. It represents economic output and health, and measures economic growth.
Step-by-step explanation:
Gross domestic product (GDP) is best defined as the current value of all final goods and services produced in a nation within a specific year. Measuring GDP by adding up the value of every good and service produced in the economy would result in double counting certain products. Therefore, it is important to focus on the value of final goods, which are the finished products at the furthest stage of production at the year’s end, to accurately reflect economic output without overestimating.
Statisticians calculate GDP by multiplying the quantities of goods and services produced by their prices, and then summing the total. It is important to note that GDP can be measured either by the total spending on these final products in the economy or the total production value, which should theoretically match. The concept of GDP aids in measuring a nation's economic growth, serving as an indicator of the overall economic health and a comparative tool for evaluating wealth.