Question

Project 2

This project has three components:

Analyse Canada’s nominal and real GDP for last 5 years with the help of a table/bar chart/Graph.

Prepare a one-page analysis on the indicators reflecting economy’s well being.

Does the following statement give you a true picture of the situation: “Real GDP in the United States is higher than real GDP in Canada. Therefore, the standard of living in the United States must be higher than that in Canada.” Why? Why not?

Answer 1

True

Explanation..

Real economic growth rate or real GDP growth rate measures economic growth because it is related to GDP from time to time, adjusted for inflation and expressed in the opposite direction. The real rate of economic growth is expressed as a percentage, which shows the rate of change of a country's GDP, usually from year to year. Another measure of economic growth is the gross domestic product (GDP), which is sometimes preferred if its economy is heavily dependent on foreign incomes.


The country's real economic growth is beneficial for government policymakers to decide on fiscal policy. These solutions can be implemented to stimulate economic growth or control inflation. Real economic growth data serve two purposes. First, real growth figures are used to compare current growth rates with previous periods to determine the general trend of growth over time. Second, real rates of economic growth are useful when comparing similar economic growth rates with different inflation rates. Compare the nominal GDP growth rate for a country with inflation of just 1% with the nominal GDP growth rate for a country with 10% inflation would be misleading because GDP has not adjusted for inflation.

For example, the real world

GDP growth rates change over the four stages of the business cycle: peak, decline, change and expansion. In emerging economies, GDP growth will be positive as businesses grow and create jobs for higher productivity. However, if the growth rate exceeds 3 or 4%, economic growth may cease. There will be a downturn where businesses will refuse to invest and rent, which means customers have less money to spend. If growth is negative, the country will go into recession.

The decline occurred most recently in late 2008 and early 2009, when growth slowed. The US was negative for four quarters. There was no decline after the recession. After the financial crisis of 2008 and 2009, the US economy rebounded. According to economists Karim Foda and Eswar Prasad, who wrote about the Brookings Institution in 2018, the United States shows real GDP growth of more than 18% before the Great Depression. However, when measuring a person or working age, the growth of GDP. S. True whites in the United States are not nearly as interesting as those in Germany and Japan.