How Is Economic Growth Measured?

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Wondering what you should pay attention to in terms of determining whether the economy is strong or not? How is economic growth measured? In this article, we’ll cover the three most valuable measurements of economic growth, gross domestic product (GDP), gross national product (GNP), and the consumer price index (CPI).

What Exactly Is Gross Domestic Product?

Gross domestic product (GDP) is the dollar amount of products and services produced in a given year. In other words, it is an instantaneous rate or snapshot of the state of a nation’s economic activity at any given time. It measures how much goods and services are being circulated in an economy. Putting that definition into simple terms, we can say that GDP measures a country’s economic wellbeing.

What Is Gross National Product?

Gross national product (GNP) measures the total value of goods and services produced in a country during a specified period. It includes all income earned by residents of that country, as well as income generated by foreign investments made in the country. It is an important indicator of the health of an economy because it represents the total value of the goods and services supplied to domestic residents.

What Is the Consumer Price Index?

The consumer price index (CPI) is an indicator of inflation in the economy. This measures how much prices have changed over time for consumers. The CPI is also used to indicate how well the economy is doing. When inflation increases, people buy more. They think prices will continue to rise, stimulating demand and driving economic growth.

Want to Learn More About Long-Term Economic Growth? EDC Is Here to Help!

EDC is committed to enhancing and advancing the quality of life. This is done through fostering company growth, creating jobs, and implementing initiatives that foster sustainability and resiliency through economic development.

Get in touch with us at 305-378-9470 or use our contact form if you want assistance or advocacy for your company’s needs or if you wish to spread the word about projects that will improve the vitality and stability of the South Miami-Dade area.