Which of the following describes the economic measure known as GDP?

The correct definition of GDP (Gross Domestic Product) is the total output of goods produced within a country. This measure reflects the economic performance of a country by calculating the monetary value of all finished goods and services produced within its borders over a specific time period, usually a year. GDP includes various sectors of the economy such as manufacturing, services, and agriculture, giving a comprehensive view of a country’s economic activity.

In contrast, the other options either misrepresent GDP or address entirely different economic concepts. For instance, the total level of financial assets pertains to the valuation of assets held by households, businesses, and governments, rather than their production output. The sum total of all transactions in a year related more to the concept of gross sales or financial transactions, which do not directly equate to the production of goods and services. Additionally, the balance of imports and exports refers to the trade balance, which measures international trade relations, not the overall output of an economy. Thus, the chosen answer accurately captures the essence of what GDP measures.