Question

n economy’s GDP falls, then it must be the case that the economy’s a. income and saving fall. b. income and market value of all production both fall. c. income falls and market value of all production rises.

Answer 1

A. income and savings will fall.

Explanation: GDP(gross domestic product) is a macroeconomic measure that is used to describe the total value or amount of goods and services rendered within an economy or a country in a given time period.

THE RISE AND FALL OF THE GROSS DOMESTIC PRODUCT (GDP) IS DIRECTLY PROPORTIONAL TO THE RISE AND FALL OF THE VALUE OF GOODS AND SERVICES RENDERED WITHIN AN ECONOMY OR A COUNTRY IN A GIVEN PERIOD AND THIS IS DIRECTLY PROPORTIONAL TO THE RISE AND FALL OF INCOME AND SAVINGS OF THE COUNTRY.

Answer 2

Answer: If an economy's gross domestic product falls(GDP), it must be the case that the economy's income and saving falls.

Step-by-step explanation:

Gross Domestic Product (GDP) is used to calculate the total market value of every finished goods and services that are produced within a country's borders at a particular period of time. Gross domestic product functions as the comprehensive scorecard of the economic health of a country measuring the overall domestic production of that particular economy.

When there is a fall in a country's gross domestic product, there will have been a fall on the country's income and savings. A lower income will bring about a reduction in the gross domestic product. Since higher income leads to higher savings and lower income is also proportional to lower savings, it therefore follows that a reduction in gross domestic product will be as a result of fall in income and savings.