ECONOMICS

Detailed explanation-1: -GDP, the most popular way to measure economic growth, is calculated by adding up all of the money spent by consumers, businesses, and the government in a given period. The formula is: GDP = consumer spending + business investment + government spending + net exports.

Detailed explanation-2: -The most common way to measure the economy is real gross domestic product, or real GDP. GDP is the total value of everything-goods and services-produced in our economy.

Detailed explanation-3: -Since GDP is measured in a country’s currency, in order to compare different countries’ GDPs, we need to convert them to a common currency. One way to compare different countries’ GDPs is with an exchange rate, the price of one country’s currency in terms of another. GDP per capita is GDP divided by population.

Detailed explanation-4: -GDP is measured by taking the quantities of all goods and services produced, multiplying them by their prices, and summing the total. GDP can be measured either by the sum of what is purchased in the economy or by what is produced. Demand can be divided into consumption, investment, government, exports, and imports.

Detailed explanation-5: -In addition to GDP, two of the other most significant measures of economic growth are the Consumer Price Index (CPI), which measures pricing power and inflation, and the Monthly Unemployment report, including weekly non-farm payrolls.