Advanced Placement (AP) Human Geography Practice Exam

Which economic measure reflects the total value of all final goods and services produced within a country annually?

1. Gross national product (GNP)

2. Net domestic product (NDP)

3. Gross domestic product (GDP)

4. Per capita income

The correct answer is: Gross domestic product (GDP)

The correct answer is the economic measure that captures the total value of all final goods and services produced within a country's borders during a specific time frame, typically a year. This measure is known as Gross Domestic Product (GDP). It reflects the production and economic activity within the country, making it a vital indicator of domestic economic health. GDP includes consumption, investment, government spending, and net exports (exports minus imports), ensuring that it accounts for all economic transactions occurring within the nation's geographical boundaries. In contrast, Gross National Product (GNP) measures the total economic output produced by the residents of a country, regardless of whether the production occurs domestically or abroad. Net Domestic Product (NDP) adjusts GDP for depreciation, accounting for the loss of value from wear and tear on capital goods. Per capita income provides a mean income per person within a specific area, which does not specifically measure the total economic output. Each of these alternatives serves different purposes in economic analysis, but the defining characteristic of GDP is its focus on domestic production within a country.