Monday, February 10, 2014

Factors affecting Gross Domestic Product GDP?

Factors affecting Gross Domestic Product GDP?
GDP is comprised of consumption, investment, and government spending plus net exports (exports minus imports). It can be summed up by this equation:

GDP = C + I + G + (X - M)

Edit: In terms of what actually affects GDP, there are quite a few factors. Because GDP is the total output of an economy in a nation over a period of time (quarterly, annually), unemployment has a significant effect . A large portion of GDP is because of consumer spending. If there's high unemployment, people haven't the money to spend so GDP will reduce and economic growth will be stifled. There's also poverty, import/export, government spending etc.

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