What is GDP equal to?

Gross Domestic Product (GDP) is fundamentally defined as the total monetary value of all finished goods and services produced within a country's borders during a specific time period, typically a year. The amount of expenditure incurred by those who purchase, which is option B, accurately reflects this concept, as it encompasses all the spending by consumers, businesses, government entities, and net exports (exports minus imports).

When we refer to GDP in terms of expenditure, we recognize the contributions of different sectors to the overall economy. This includes consumer spending (personal consumption), business investments, government spending, and the net value of exports. Each of these components adds to the total expenditures in an economy, providing a comprehensive view of economic activity.

Understanding GDP through the lens of expenditure is crucial as it not only informs policymakers about the economic state of a nation but also helps in assessing growth trends, evaluating fiscal policies, and making international comparisons. Thus, option B captures the essence of how GDP is calculated and represented in economic analyses.