Series 62

Economic Fundamentals - Gross Domestic Product

A country’s Gross Domestic Product or GDP measures the overall health of a nation’s economy. The Gross Domestic Product is defined as the value of all goods and services produced in a country including consumption, investments, government spending, and exports minus imports during a given year.

Economists chart the health of the economy by measuring the country’s GDP and by monitoring supply and demand models, along with the nation’s business cycle. A country’s economy is always in flux. Periods of increasing output are always followed by periods of falling output. The business cycle has four distinct stages:

  1. Expansion
  2. Peak
  3. Contraction
  4. Trough

 




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