A discussion on the gross domestic product as a measurement of the economy.
The paper explains that GDP is a measure of the production and consumption pattern in the country and can also be interpreted as an indicator of market activity. The paper considers both the positive and negative aspects of the GDP and notes that the GDP has become the favorite jargon of politicians and economists who want to paint a rosy picture of the economy. The paper asserts, however, that while the GDP gives an indication of quantity, it does not specifically give us a break up of the economic activity and so does not help us to properly analyze the quality of the economy.
“From the above equation, it is clear that GDP is a measure of the production and consumption pattern in the country because all the variables listed in the above equation reflects business transactions or buying and selling of products or services.
“GDP can also be interpreted as an indicator of market activity. If the GDP is high, it means that the markets are doing well and if it is low, it means that the markets are having a tough time. Since the measurement of GDP takes into account a wide range of factors that effectively covers all the products and services that are traded in a country, it reflects the economic strength of a country. No wonder that GDP is often quoted and misquoted by politicians and economists to score points against their adversaries.”
“GDP can also be interpreted as an indicator of market activity. If the GDP is high, it means that the markets are doing well and if it is low, it means that the markets are having a tough time. Since the measurement of GDP takes into account a wide range of factors that effectively covers all the products and services that are traded in a country, it reflects the economic strength of a country. No wonder that GDP is often quoted and misquoted by politicians and economists to score points against their adversaries.”