If a country's gross domestic product (GDP) is consistently growing, what type of economy does it most likely have?

• A. An expanding economy
• B. A stagnant economy
• C. A closed economy
• D. A contracting economy

Answer: (A)

Verified step by step guidance

1. Understand the definition of Gross Domestic Product (GDP): GDP measures the total value of all goods and services produced within a country over a specific period.
2. Recognize that if GDP is consistently growing, it means the overall economic output is increasing over time.
3. Recall the types of economies based on GDP trends: an expanding economy has growing GDP, a stagnant economy has little or no growth, and a contracting economy has declining GDP.
4. Identify that a closed economy refers to one that does not engage in international trade, which is unrelated to GDP growth trends.
5. Conclude that consistent GDP growth indicates an expanding economy, as the economy is increasing in size and output.