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How GDP determines one country currency fluctuation?

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Question added by Manoharan Vallamunji Kasinathan Vallamunji , Purchase Engineer (Supply Chain Management) , ITR MIDDLE EAST
Date Posted: 2014/04/28
Jahabar Sadiq Ifthikar
by Jahabar Sadiq Ifthikar , Senior Procurement Specialist , University of Hafr Al-Batin

Gross Domestic Product

GDP is the amount of all goods and services produced in a given country within a given period of time.

GDP measures a country’s total output. Since (almost) all that is produced in an economy is eventually bought and turned into income, GDP also measures the amount of income earned in a country for a given period of time.

How is GDP used?

  • GDP measures how big a nation is in economic terms
  • GDP per capita is often used to compare the welfare of different countries. Because GDP is also a measure of income, GDP per capita gives an idea of how wealthy the people are on average for a given country. (note: per capita means that you divide total GDP by the number of people in the country)
  • The speed at which GDP grows determines how fast an economy is growing and how healthy the economy is. Higher growth most often means that the economy is strong. If the growth rate of GDP for a country were negative, that country is producing less this year than it did the previous year and the country is in what is called arecession.

 

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