How To Guide For: A Look At Gross Domestic Product --What Is This--How Does It Work--How Does It Imp

Gross Domestic Product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. GDP is usually calculated on an annual basis, it can be calculated on a quarterly basis as well. Gross Domestic Product (GDP) is the most important of all economic statistics as it attempts to capture the state of the economy in one number. Gross Domestic Product (GDP) is measured in three ways using the: Production approach, Income approach and Expenditure approach. All three methods of measuring GDP should result in the same number. GDP also affects the economy in many ways. One way GDP impacts the economy is when the GDP rises. When this happens people are spending more money to purchase goods on the market. So to prevent inflation, the Federal Reserve will raise the prime interest rate, making the supply of money scarcer. When the GDP shrinks, the Federal Reserve often lowers the interest rate, making it easier to borrow money and encouraging expenditures. There is so much more to learn about GDP, how it works and how it impacts the economy. To get more in depth information click on the pictures below to read the articles.