What best explains why a nation's GDP is an indication of its citizens' overall well-being?

A nation's GDP, or Gross Domestic Product, serves as a critical indicator of its citizens' overall well-being because it reflects the total monetary value of all goods and services produced within a country during a specific time period. By measuring the number of voluntary economic transactions, GDP captures the level of economic activity and can provide insights into the standard of living and quality of life of the population.

When voluntary transactions occur, it indicates that consumers are actively participating in the economy, making purchases that reflect their needs and preferences. Higher levels of production and consumption often lead to increased employment levels and wages, which directly improve financial stability and living conditions for citizens. Therefore, a growing GDP typically correlates with better access to goods and services, improved infrastructure, and enhanced public services—all of which contribute to overall well-being.

In contrast, tracking imports, measuring government spending effects, or evaluating money depreciation regulation, while they are important aspects of economic analysis, do not directly measure the impact on citizens' quality of life in the same way that GDP does through voluntary economic transactions.