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VIDEO: Why GDP Matters
Highlights
- Gross Domestic Product measures the value a nation creates over a specified period.
- GDP is a vital statistic for tracking an economy?s overall performance.
- GDP is affected by government spending, consumption, investment and exports.
Gross Domestic Product or GDP is a vital measure of how much economic value a nation creates over a specified period - usually a financial year.
If GDP is stable or growing, then the economy is considered to be healthy, but if GDP falls then it risks recession or even social unrest.
GDP is calculated through a simple equation that adds together consumption, government spending, investment and net exports.
To keep GDP healthy, governments worldwide concentrate on stimulating or supporting one or all of these economic pillars.