To avoid double counting, GDP counts only final output of goods and services, not the production of intermediate goods or the value of labor in the chain of production Economists generally express the size of a nation’s economy as its gross domestic product (GDP), which measures the value of the output of all final goods and services produced within the country in a year.

We can divide what is produced in the economy into durable goods, nondurable goods, services, structures, and inventories. Economists measure GDP by taking the quantities of all goods and services produced, multiplying them by their prices, and summing the total.

double counting — a potential mistake to avoid in measuring GDP, in which output is counted more than once as it travels through the stages of production. service — product which is intangible (in contrast to goods) such as entertainment, healthcare, or education. sum of what — purchased in the economy or what is produced. intermediate good — output provided to other businesses at an intermediate stage of production, not for final users; contrast with “final good and service”.