Economists can use GDP to determine whether an economy is growing or experiencing a recession. Investors can use GDP to make investment decisions—a bad economy often means lower earnings and stock prices. GDP measures the monetary value of goods and services produced within a country's borders in a given time, usually a quarter or a year.
Why do economists track real GDP?
Economists track real gross domestic product (real GDP) to determine the rate at which an economy is growing without any of the distorting effects of inflation. The real GDP number allows them to measure growth more accurately.
How does GDP measure economic health?
Changes in output over time as measured by the GDP are the most comprehensive gauge of an economy's health. GDP figures are reported in the United States every month by the Bureau of Economic Analysis (BEA) both in nominal as well as real, or inflation-adjusted, terms.
