Gdp is supposed to indicate economic health because it is supposed to rise when a. Inflation is low. B. Prices are falling. C. Wealth is being created. D. Unemployment levels are falling. E. Unemployment levels are rising.
C. Wealth is being created.
D. Unemployment levels are falling.
GDP, or Gross Domestic Product, measures the total value of all goods and services produced within a country's borders during a specific period of time. It is commonly used as an indicator of the economic health of a country.
When wealth is being created, it means that the economy is growing and expanding, leading to an increase in GDP. This can happen through various factors such as increased production, investment, and consumption.
When unemployment levels are falling, it indicates that more people are finding jobs and earning income. This leads to increased consumer spending and overall economic activity, resulting in a higher GDP.
On the other hand, options A, B, and E are not necessarily indicators of economic health:
A. Inflation being low does not guarantee economic health, as it can be a result of various factors such as weak demand or stagnant economic growth.
B. Prices falling, also known as deflation, can actually be a sign of economic instability and can discourage consumption and investment, thereby negatively impacting GDP.
E. Unemployment levels rising typically indicate economic downturn or recession, as it means more people are losing their jobs and have less disposable income, leading to lower consumption and a decrease in GDP.