What is the Difference Between GDP and Growth Rate?
What is the Difference Between GDP and Growth Rate?Answer: GDP (Gross Domestic Product) is the total dollar amount of all goods and services produced. The growth rate is the percentage increase or decrease of GDP from the previous measurement cycle. Even though the BEA reports quarterly, the growth rate is annualized so it can be compared to the previous year. The GDP growth rate is driven by retail expenditures, government spending, exports and inventory levels. Rises in imports will negatively affect GDP growth. The GDP growth rate is the most important indicator of economic health. If GDP is growing, so will business, jobs and personal income. If GDP is slowing down, then businesses will hold off investing in new purchases and hiring new employees, waiting to see if the economy will improve. This, in turn, can easily further depress GDP
