How does gross domestic product (gdp) represent the health of an economy? list two ways that a gdp is representative of the overall strength or weaknesses of an economy.

Answer

Hi,

•A strong GDP represents strength of an economy because companies will employ more workers and pay better salaries and wages. This will mean that people will have more to spend for goods and services enabling the government to get taxes.

•A weak GDP represents a weakness in the economy in that firms will lose the confidence to invest more because the economy will be proceeding to recession. Employees might face retrenchment and wages/salaries may be lower than expected.

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