QAEconomics › When economists determine that a nation’s GDP has declined, they can point to this as
Q

When economists determine that a nation’s GDP has declined, they can point to this as

1) a sign of economic shrinkage.

2) economic growth.

3) low unemployment.

4) poor leadership.

A

Answer: 1. Economic shrinkage.

The Gross Domestic Product (GDP) of a country refers to the monetary estimation of goods and services produced in a country within a fiscal year. A negative GDP value indicates a shrinkage in the economy.

A decline in a nation’s GDP is a sign that the nation’s economy is experiencing shrinkage, as it indicates that a country is in a state of depression. When this happens, consumers spend with respect to disposable income, tax rate, debt, etc. Economic shrinkage occurs when there is a reduction in spending, which reduces the market value of goods and services.

3 years ago
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