Measuring Economic Growth

Economic growth: They tool we use to determine how the economy is growing is called GDP or Gross Domestic Product. GDP shows us the amount of services or good the United States produces during a specific time period. There is negative and positive things about GDP and one positive it measures how the economy is growing . There is also another important way to measure growth of an economy and that is called real GDP ( real Gross Domestic Product) . Real GDP is easier to compare than GDP and shows us a growth in prices in a certain year. Genuinely for an economy to be running normally GDP has to have a three percent increase every year. Now the negative things about GDP is, it shows too much of the negative and thinks that it's a positive

Inflation means the increase of prices over a given time period. This has a positive measure to an economy because it shows the measure of price stability and if it's too high of prices that change which is not the best thing , and if it doesn't stop your economy is on the right path. To measure inflation in an economy the government creates a price index. This shows how the price of a product changes over a period of time and the change in price level in inflation. There is one major problem that inflation does to an economy. The years of 1982-1984 is the base year for inflation and there were new items arising in the time period that affected the price stability. A way to fix this scenario is to make the inflation in our economy at least around three percent like GDP. For an indicator for price stability ,with inflation I would give the United States economy a B+. The reason why they deserved this grade is in the year of 2013 inflation went up around three percent higher than year 2012 so that shows that the United States economy is running well. It was only a one year not having the best inflation numbers I believe the economy gets a C+ because there is room for

Unemployment rate is one indicator for employment. Unemployment means a situation where someone of working age is not able to get a job but would like to be in full time employment. Usually for our economy to be running at a normal pace , unemployment rate should be around 7 or 8 percent. With unemployment being a hard problem to individuals going through it, some don't look for work and aren't included in the unemployment rate. With this situation the unemployment rate is looked at to not be accurate and is usually really good or really bad. To solve this is a very simple solution, is just to add the individuals who are unemployed and that arent looking for work. For this little bump in our economy i would give the United States an A-. The unemployment rate since 2013 has been decreasing every year and that is a good statistic for the United States