Gross Domestic Product (GDP) is the value of all final goods and services produced

The correct answer is B. GDP measures production inside the borders of a country in one accounting year, whoever the producer may be. A foreign firm making cars in India adds to India's GDP, because the test is the place of production and not the nationality of the producer.

Option A describes Gross National Product, which counts what the residents of a country produce anywhere in the world; the two differ by net factor income from abroad. Option C is wrong because GDP covers the whole economy, private and public, organised and, as far as it can be estimated, unorganised. Option D contradicts the definition: only final goods are counted, since including intermediate goods would count the same value more than once, as with wheat, flour and bread. This idea of value added at each stage is the basis of the product method of measurement.