Gross domestic product (GDP) measures what aspect of an economy?

Gross domestic product (GDP) measures the total output of goods and services produced within a country over a specific time period, typically a year or a quarter. It reflects the overall economic performance and health of a nation, providing a comprehensive assessment of economic activity. GDP includes all final goods and services, which helps to gauge the economic productivity and the standard of living of a population. By measuring this output, GDP serves as a critical indicator for policymakers, economists, and analysts to understand the dynamics of the economy, including trends in growth or recession.

The other options address different aspects of the economy. The level of inflation focuses on the rate at which general price levels rise, affecting purchasing power but not directly measuring output. The balance of trade pertains to the difference between a country's exports and imports, providing insight into international trade dynamics rather than overall economic output. Lastly, the rate of unemployment measures the proportion of the labor force that is unemployed and does not capture the broader economic output. Therefore, while all these factors are important in assessing economic conditions, they do not quantify total production in the manner that GDP does.