According to this passage, what is exactly GDP?

Governments throughout the world make public reports about the condition of their economics. Most do this by measuring the value of their countries’ yearly production of goods and services. Some countries including the Unites States have used a measure called the "gross national product" or GNP. It includes all goods and services produced by citizens of the country anywhere in the world. Recently the American Commerce Department began using a new method to measure production. The new method is known as the "gross domestic product" or GDP, It counts only goods and services that have been produced within the nation’s borders. Earnings by foreign-owned companies operating in the United States are included in the GDP. But earnings of American companies operating in other countries are not. Economic experts generally approve of the change. They say the gross domestic product provides a truer measure of the economy. They also note that most other industrial countries use this method. Therefore, they say, it will be easier to study the economies of different countries. Some officials also say the new system will help them to make better economic policy decisions. They say it will provide them with a clear understanding of economic activity in the United States. The new measure, officials say, is less likely to be affected by sadden changes in foreign oil prices or in the value of the American dollar in other countries. Economic experts say the changes from GNP to GDP reduces the value of American production by at least 40,000 million dollars a year, but that is really a very small change in the American economy, less than one percent.