how does the GDP , share of different sectors and related concepts of economy impact the business environment of country
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PART OF
Guide to Economics
ECONOMY ECONOMICS
What Is GDP and Why Is It So Important to Economists and Investors?
By LESLIE KRAMER
Updated Oct 17, 2020
TABLE OF CONTENTS
EXPAND
Overview
Nominal vs. Real GDP
Measuring GDP
GDP for Economists and Investors
The Bottom Line
Gross domestic product (GDP) is one of the most common indicators used to track the health of a nation's economy. The calculation of a country's GDP takes into consideration a number of different factors about that country's economy, including its consumption and investment.
GDP is perhaps the most closely-watched and important economic indicator for both economists and investors alike because it is a representation of the total dollar value of all goods and services produced by an economy over a specific time period. As a measurement, it is often described as being a calculation of the total size of an economy. GDP is also a key factor in using the Taylor rule, which is a primary method used by central bankers to evaluate economic health and set the target interest rates in an economy.