SACE Stage 2 Economics Practice Exam 2026 – Your All-in-One Resource for Exam Success!

The term that refers to the total goods and services produced in a year is GDP, or Gross Domestic Product. GDP is a key indicator used in economics to gauge the health of a country's economy. It encompasses all economic activities, measuring the monetary value of all finished goods and services produced within a country's borders during a specific time period, typically a year.

GDP can be calculated using various approaches, such as the production approach, income approach, or expenditure approach, but the underlying concept remains the same: it represents the overall economic output. This measurement helps analysts and policymakers understand the size and performance of an economy, allowing for comparisons over time or between different economies.

The other terms do not refer to the total output of goods and services. Wage refers to compensation received by labor, income provision typically pertains to methods of distributing income, and a market economy describes an economic system where decisions regarding production and consumption are based on voluntary exchanges in markets. None of these terms encapsulate the comprehensive measure of economic activity that GDP provides.