What is GDP a measure of?

GDP, or Gross Domestic Product, fundamentally measures the total market value of all final goods and services produced within an economy over a specific period of time, usually one year. This definition is crucial because it reflects the overall economic performance and health of a country. It encapsulates the production output of businesses, the consumption by households, government spending, and net exports (exports minus imports).

By focusing on final goods and services, GDP avoids the issue of double counting that can arise if intermediate goods are included. This means it gives a clear picture of the economic activity that contributes directly to the output of goods and services available in the economy.

In contrast, factors such as the health of a country’s banking system, total income generated by individuals, or the combined economic activity of all countries do not specifically define GDP. While these aspects may influence or reflect the economy, they do not encapsulate what GDP measures directly. Therefore, the chosen answer accurately captures the essence of GDP as a broad indicator of economic production and activity within a country's borders.