What does Gross Domestic Product (GDP) measure?

Gross Domestic Product (GDP) measures the value of all goods and services produced in an economy within a specified period, typically a year. It reflects the overall economic activity and performance of a country. By quantifying the total value of final goods and services, GDP provides a comprehensive snapshot of the economic health of a nation.

This measurement includes all production activities, regardless of who produces them, whether by domestic or foreign companies operating within the country. As a result, GDP serves as a vital indicator for assessing economic growth and comparing economic productivity across different nations or time periods.

In contrast, the other options focus on aspects that GDP does not directly measure. For instance, while the total income of a nation is related to GDP, it does not fully capture the production aspect central to GDP. Financial health of businesses pertains more to business performance metrics rather than overall economic output, and wealth distribution involves social and economic equity factors that GDP does not address directly. Thus, the correct choice closely aligns with the fundamental definition and purpose of GDP.