GDP measures a country's:

• A. Number of employed people
• B. Total government spending
• C. Total economic output
• D. Net exports

Answer: (C)

GDP measures the total economic output of a country—the market value of all final goods and services produced within its borders in a given time period. It captures the size of the economy by adding up what people and businesses spend on final goods and services, plus government purchases, plus investments, plus net exports (exports minus imports). This is why GDP reflects overall production, not just one aspect like how many people are employed, or just how much the government spends, or only the trade balance.

The number of employed people focuses on employment levels, not total production. Government spending is a part of GDP, but GDP includes more than just that component. Net exports are also a component of GDP (and can be positive or negative), but they do not by themselves equal the entire measure.