GDP is equal to the total market value of all final goods and services produced domestically in the economy during a specific time period.

GDP only measures the value of final goods (e.g. bread) and final services (e.g. a restaurant meal) and does not measure the value of intermediate goods (e.g. the flour used to make bread) and intermediate services (e.g. the electricity used by the restaurant) to avoid double-counting.

To compute the nominal GDP of each time period, the value of each good or service is the market price in that time period (the current price). Changes in nominal GDP are due to changes in economic activity and changes in prices. To compute the real GDP of each time period, the current price of one year (the base year) is used and it is not changed across time periods (constant price). Changes in real GDP are only due to changes in economic activity.

The time period is usually a year (based on annual national accounts) or a quarter (based on quarterly national accounts). Quarterly national accounts are provided in unadjusted or seasonally adjusted form, where seasonal adjustment removes predictable seasonal variation in economic activity (e.g., due to tourism economic activity is higher in the summer than in the winter).

GDP is measured in three equivalent ways: the Expenditure approach, the Production approach, and the Income approach.

According to the expenditure approach, GDP is equal to the sum of final consumption (government and private), investment (government and private), and net exports (exports minus imports). An alternative, equivalent breakdown is to consider the sum of private spending (consumption and investment), government spending (both consumption and investment), and net exports (exports minus imports).

The next graph presents the evolution of nominal and real GDP and its decomposition into its components in annual and quarterly data.

The next graph presents the contribution of each component to the change of GDP.

Investment (gross capital formation) consists of two main parts. The first one is fixed investment (gross fixed capital formation) and it measures the acquisition of assets that are intended for the production of goods and services for a period of more than a year. Examples include the purchase of machines and equipment, and the construction of housing and workplaces. Fixed investment affects the economy's production potential.

The second one is the change of inventories and it measures the change in the stocks in the economy, which can be positive or negative (an increase in stocks has a positive sign, while a decrease in stocks has a negative sign). Ιnventories tend to be very volatile and, for this reason, they are an important component of business cycle fluctuations.

The next graph presents the evolution of gross capital formation (investment), gross fixed capital formation (fixed investment), and inventories.

The difference between export revenue and import expenditures is the trade balance, or net exports. The next graph presents the evolution of exports, imports, and net exports.

According to the production approach, GDP is equal to the Gross Value Added (GVA) that is produced by the economy's sectors (such as Construction, Industry, etc.), plus taxes minus subsidies on production. A sector's GVA is equal to the value of the sector's output, excluding the value of intermediate goods and services used as production inputs from other sectors (e.g., the Construction sector uses machinery produced by the Industry sector).

The next graph presents the economy's Gross Value Added (GVA).

The next graph presents the contribution of each sector to changes in GVA.

According to the income approach, GDP is equal to the sum of the compensation of employees (including wages, salaries, and employers' contributions) and the gross operating surplus (i.e., profit) of firms and the self-employed, plus taxes minus subsidies on production.

The GDP deflator is defined as the ratio of nominal over real GDP. Its evolution across time reflects the changes in the price level of all domestically produced, final goods and services. The GDP deflator can be computed for each expenditure component of GDP, hence, in addition to GDP, consumption, investment, exports, and imports have their own deflator.