3.1 Measuring Economic Activity

This lesson explores how economic activity is measured, focusing on Gross Domestic Product GDP and its role in assessing economic performance. You'll learn how GDP is calculated, its limitations, and what it reveals about growth. We’ll also examine the AD-AS model to understand demand, supply, and the factors driving economic expansion.

GDP, which represents the total value of all goods and services produced within a country over a specific period, usually a year. GDP serves as a key measure of economic performance, offering a snapshot of a nation's productivity and living standards. To better understand the factors influencing GDP and economic growth, we will now explore the AD-AS model, which shows the relationship between total demand, supply, and output in an economy.