Measuring the Health of the Economy

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Examine how changes in GDP reflect the health of an economy to learn about economic growth. Although GDP provides a snapshot of total output, changes in GDP reveal whether an economy is expanding or contracting. Growth in GDP indicates positive momentum, which is especially important when economies are recovering from a recession. After reviewing the material, complete the provided exercises to apply what you've learned.

Every day, we are bombarded with economic news. We're told that the economy is struggling, unemployment is high, home prices are low, and consumer confidence is down. As a student learning about business, and later as a business manager, you need to understand the nature of the U.S. economy and the terminology that we use to describe it. You need to have some idea of where the economy is heading, and you need to know something about the government's role in influencing its direction.

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