GDP (Gross Domestic Product) is the single most important indicator of a country's economic health. It measures the total value of everything produced within a country's borders — every car manufactured, every haircut given, every software developed — during a specific period (usually quarterly or annually).
The formula: GDP = Consumption + Investment + Government Spending + (Exports - Imports). The US leads with a GDP of about $28 trillion (2024). China is second at $18 trillion. India is fifth at about $3.7 trillion. Together, the top 10 economies account for roughly 65% of global GDP.
GDP per capita (GDP divided by population) is more useful for comparing living standards. The US GDP per capita is about $85,000, while India's is roughly $2,700. However, GDP has limitations — it does not measure income inequality, environmental damage, unpaid household work, or overall well-being. Bhutan famously uses Gross National Happiness alongside GDP.