Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Find a Job
  • Tutoring
  • Home
  • Economics, Finance, & Analytics
  • Economic Analysis & Monetary Policy

Tracking Real GDP

Why is Tracking Real GDP Important?

Written by Jason Gordon

Updated at March 27th, 2023

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Why is Tracking Real GDP Important? 

Real GDP is important because it is highly correlated with other measures of economic activity, like employment and unemployment. 

When real GDP rises, so does employment.

The most significant human problem associated with recessions (and their larger, uglier cousins, depressions) is that a slowdown in production means that firms need to lay off or fire some of their workers. 

Losing a job imposes painful financial and personal costs on workers, and often on their extended families as well. In addition, even those who keep their jobs are likely to find that wage raises are scanty at best—or their employers may ask them to take pay cuts.

We call the highest point of the economy, before the recession begins, the peak. Conversely, the lowest point of a recession, before a recovery begins, is the trough. Thus, a recession lasts from peak to trough, and an economic upswing runs from trough to peak. We call the economy's movement from peak to trough and trough to peak the business cycle. 

Back to:ECONOMIC ANALYSIS & MONETARY POLICY

Related Topics

  • Macroeconomics
  • Macroeconomic Frameworks
  • Macroeconomic Policy Tools
  • Productivity Economics
  • One-Third Rule
  • Gross Domestic Product (GDP)
  • Durable and Non-Durable Goods
  • Weightless Economy
  • Intermediate and Final Goods or Services
  • Nominal GDP
  • Converting Nominal to Real GDP
  • GDP Inflator
  • Nominal GDP Price Index
  • Measuring GDP
  • Gross National Product
  • Net National Product
  • Factor Income
  • Gross National Income
  • Expenditure Method
  • The Problem of Double Counting GDP
  • Double Counting
  • Why is Tracking Real GDP Important? 
  • Convert Currencies with Exchange Rates
  • Convert GDP to a Common Currency
  • Per Capita GDP
  • GDP Per Capita
  • GDP as a Measure of Society Well-Being
  • Limitations of GDP as a Measure of the Standard of Living
real gdp track gdp track real gdp

Was this article helpful?

Yes
No

Related Articles

  • Productive Efficiency - Explained
  • Basket of Goods - Explained
  • Neutrality of Money - Explained
  • Deflation - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand