Final answer:
Inflation, deflation, the rate of economic growth, price levels, national income, changes in employment rates, and GDP are indicators of a country's economic performance, with GDP being a primary measure of economic health. These factors are closely analyzed to track, understand, and respond to economic changes and the business cycle.
Step-by-step explanation:
The terms inflation, deflation, the rate of economic growth, price levels, national income, changes in employment rates, and GDP collectively refer to key indicators that measure a country's economic performance. In particular, GDP, or Gross Domestic Product, is the value of all goods and services produced within a nation in a year and is a critical measure of economic growth and overall economic health. Adjusting the nominal GDP for inflation or deflation gives us the real GDP, which more accurately reflects the actual level of a nation's output.
The business cycle represents the economy's short-term fluctuations, such as expansion and recession. Inflation is closely monitored since it affects the purchasing power of consumers. Conversely, deflation indicates a decrease in the price level of goods and services, which can also significantly impact an economy. GDP per capita, which is GDP divided by the population, helps to measure the standard of living across different economies.