ECONOMICS
GDP
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Real GDP is $18 trillion.
|
|
|
Real GDP grew by 3 percent this year.
|
|
|
Nominal GDP is $18 trillion.
|
|
|
Nominal GDP grew by 3 percent this year.
|
Detailed explanation-1: -Since the real GDP measures the entirety of the U.S. economy, it’s considered to be a key indicator of economic health. The real GDP is most often framed in terms of its percentage growth or decline. When the real GDP increases, it suggests businesses are producing a higher value of goods and services.
Detailed explanation-2: -GDP is important because it gives information about the size of the economy and how an economy is performing. The growth rate of real GDP is often used as an indicator of the general health of the economy. In broad terms, an increase in real GDP is interpreted as a sign that the economy is doing well.
Detailed explanation-3: -Once upon a time the health of the economy could largely be gauged by looking at three indicators of economic well-being: the inflation rate, the unemployment rate, and the growth rate of the gross domestic product.
Detailed explanation-4: -Real GDP is a better indicator of economic growth because it can be compared with base year GDP. While nominal GDP cannot be compared to any previous year’s GDP.