Question

GDP (gross domestic product) is supposed to indicate economic health because it is supposed to rise whenA)inflation is low.B)prices are falling.C)wealth is being created.D)unemployment levels are falling.

Answer 1

GDP (gross domestic product) is supposed to indicate economic health because it is supposed to rise when wealth is being created.

Option: C

Explanation:

Gross domestic production and Gross national product both are important from economic growth point of view. Economic health of a country is determined by the status of demand, supply and moreover price structure. All these phenomena is interlinked and affect GDP and GNP.

If a country's gross domestic production rate increases then its national income level will also increase. Therefore. a country's wealth is the very basic base of creation of perfectly structured GDP and GNP. Strong wealthy nation comprises firm production level.