What does Gross Domestic Product (GDP) measure?

Gross Domestic Product (GDP) measures the economic output of a country by calculating the total value of all goods and services produced over a specific time period, usually a year. It serves as a broad indicator of a nation’s economic performance and health. Economists often use GDP to gauge the size and efficiency of an economy, making it a crucial tool for assessing economic growth and comparing economic productivity between different countries or regions.

This measurement includes various sectors such as manufacturing, services, and agriculture, encompassing both private and public sectors. By providing a comprehensive snapshot of a country’s economic activities, GDP can influence policy decisions, investor confidence, and international economic relations.

The other aspects mentioned—happiness, environmental impact, and income distribution—while important in their own right, do not directly pertain to GDP's primary purpose of quantifying economic output. Thus, they fall outside the scope of what GDP specifically measures.