What purposes does the gross domestic product serve?

Gross Domestic Product (GDP) measures the value of all finalized goods and services of a country within its geographical border over a period of time.

It allows for:

-Historical comparison: If the country is producing more goods than it did before

-International comparison: Compare how the economy is doing with respect to other economies

-Identify booms and recession and the business cycles.

-As a political tools

-Measured alongside with Human Development Index to see the proportion of GDP with increase (decrease) of HDI.