Question

WHAT ARE 3 ECONOMIC INDICATORS OF A COUNTRY? EXPLAIN EACH IN DETAIL.

Answer 1

Gross Domestic Product- GDP measures the market value of all the final goods and services produced during a given period within a country. The figure is typically issued in nominal and actual formats, with real GDP adjustment for currency value adjustments. This measure is one of the most watched by the financial markets, despite its broad scope.

A country's GDP expansion is representative of a rising economy, while a GDP contraction suggests a decline in a country's economy. Meanwhile, the expected GDP growth rate of a nation may be used to assess a suitable level of sovereign debt, or to assess if companies operating within the nation are likely to expand.

Employment Indicators- The prosperity and richness of the people of a nation is arguably the prime determinant of economic growth. Employment metrics, such as statistics on work force, wages and unemployment, measure how many people are working and whether they earn more or less money than previously.

These employment indicators are watched closely by the financial markets, particularly in developing countries that generate most of their income from domestic consumer spending. A decline in jobs is also accompanied by a decrease in consumer spending which can harm GDP figures and expectations for future economic growth.

Consumer Price Index- CPI tracks changes in the prices of consumer goods and services which households buy. The index is a statistical approximation which is generated using prices from a sample of periodically collected representative objects. This measure is sometimes used as an inflation gage and can have a positive or negative impact on the currency of a country.

The financial markets are monitoring the CPI statistics closely for signs of inflation. Increasing inflation can result in higher interest rates and loans being cut, while deflation can lead to lower interest rates and higher lending.