Question

Which of the following is a measure of economic growth that is most useful for comparing countries?

1) Gross Domestic Product (GDP)
2) Consumer Price Index (CPI)
3) Unemployment Rate
4) Inflation Rate

Answer 1

Gross Domestic Product (GDP) is the most useful measure for comparing economic growth among countries since it represents the total value of goods and services produced, allowing for straightforward comparisons of economic size and growth rates.

Step-by-step explanation:

The most useful measure of economic growth for comparing countries is Gross Domestic Product (GDP). GDP represents the total monetary value of all goods and services produced within a country in a given year. This measure allows for a straightforward comparison of economic size and growth rates between nations. GDP is essential for understanding the overall economic health of a country, including its ability to produce goods and services and the standard of living of its citizens. Unlike other measures like the Consumer Price Index (CPI), Unemployment Rate, or Inflation Rate, GDP encompasses the broadest scope of economic activity. Hence, comparing the GDP of different countries provides insights into their relative economic strengths. A growth rate of more than 3% is typically seen as a positive sign of a healthy and growing economy.

Answer 2

Gross Domestic Product (GDP) is the most useful measure for comparing the economic growth of countries, as it encompasses the total value of goods and services produced in a nation within a given period.

Step-by-step explanation:

The most useful measure of economic growth for comparing countries is the Gross Domestic Product (GDP). GDP assesses the monetary value of all finished goods and services produced within a country's borders in a specific time period and reflects the size and health of a country's economy. It is often used to compare the economic performance of different countries. Other indicators like the Consumer Price Index (CPI), Unemployment Rate, and Inflation Rate provide valuable information on a country's economic conditions but are not as comprehensive as GDP for measuring and comparing economic growth.

Economists often adjust GDP for inflation to get the real GDP, which gives a more accurate reflection of an economy's size and how much it has grown from one period to another. Ultimately, the percentage change in real GDP is what indicates the rate of economic growth, with a rate of more than 3% generally signifying a healthy economy. Therefore, GDP, specifically real GDP, is the preferred metric for evaluating and comparing the economic growth rates of different countries.