Why is GDP mentioned in business news so often? provide an explaination.

Why is GDP mentioned in business news so often? provide an explaination.

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Expert Solution

GDP is mentioned in business news often as it is the single most important macroeconomic indicator that gives a significant idea about the state of the economy. Other related variables like inflation and unemployment can be even guessed just by the GDP data alone. For businesses, the GDP gives an indication about consumer demand and thus profitable future opportunities. If the GDP is high, it means that average incomes are increasing and thus the purchasing power is high. Thus, the demand will be strong and the firms can undertake profitable investment. the opposite is true if GDP is low or not growing fast enough.

Rahul Sunny answered 1 year ago

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