Economic Indicators Questions and Answers 100% Solved

Economic Indicators Questions and Answers 100% Solved Consider the formula GDP = C+I+G+(X-M). A country is undergoing a boom in consumption of domestic and foreign luxury goods. In one year, the dollar growth in imports is greater than the dollar growth in domestic consumption. Assuming nothing else has changed, what happened to GDP? ️️It went down. As imports act as a drag on GDP, the larger growth in imports offsets the growth in consumption, thereby causing GDP to decline. In 2015, an accounting gimmick gave Ireland a 26% growth rate in GDP. What does this event reflect about the nature of GDP? ️️If the measurement of economic activity evolves, GDP can change. Governments from time to time change the scope of and criteria for GDP measurement, as we saw with Nigeria and Italy. In the United States, why is there a strong relationship between unemployment and GDP? ️️Consumer spending accounts for 2/3 of the US economy. When the number of unemployed consumers rises, there is less consumer spending. The fact that the United States is largely a consumer economy leads to the tight connection between US unemployment and the US GDP. The US is a net importer, not a net exporter. Government benefit payments rise when unemployment rises. From an overall GDP perspective, however, this is more than offset by declines in consumer spending