Economists use changes in GDP to measure which of the following?

• A. The level of unemployment in an economy
• B. The rate of inflation
• C. The distribution of income among households
• D. Economic growth over time

Answer: (D)

Verified step by step guidance

1. Understand that Gross Domestic Product (GDP) measures the total value of all goods and services produced within a country over a specific period.
2. Recognize that changes in GDP over time indicate how much the economy is expanding or contracting, which is referred to as economic growth.
3. Note that GDP changes do not directly measure unemployment levels, inflation rates, or income distribution, although these factors can influence GDP.
4. Identify that economists use the percentage change in real GDP (adjusted for inflation) to assess economic growth over time.
5. Conclude that tracking changes in GDP helps economists understand whether the economy is growing, stagnating, or shrinking, which is essential for economic policy and planning.