Our word of the day is "GROSS DOMESTIC PRODUCT (GDP)"

Gross Domestic Product is commonly referred to as GDP. The GDP is one of the primary indicators

used to gauge the health of a country's economy. It represents the total dollar value of all

goods and services produced over a specific time period - you can think of it as the size

of the economy. Usually, GDP is expressed as a comparison to the previous quarter or

year. For example, if the year-to-year GDP is up 3%, this is thought to mean that the

economy has grown by 3% over the last year. As one can imagine GDP has a large impact

on nearly everyone within that economy. For example, when the economy is healthy, you

will typically see low unemployment and wage increases as businesses demand labor to meet

the growing economy. A significant change in GDP, whether up or down, usually has a

significant effect on the stock market. It's not hard to understand why: a bad economy

usually means lower profits for companies, which in turn means lower stock prices. Investors

really worry about negative GDP growth, which is one of the factors economists use to determine

whether an economy is in a recession. Measuring GDP is complicated which is why

we leave it to the economists, but at its most basic, the calculation can be done in

one of two ways: either by adding up what everyone earned in a year called the income

approach, or by adding up what everyone spent known as the expenditure method. Logically,

both measures should arrive at roughly the same total.