If a country wanted to increase their GDB tenfold, could it just increase salaries by ten, force companies to pay ten times more and spend 10 times more in every field as well ? So that everything is increased proportionally, thus making the GDP grow.

Question

If a country wanted to increase their GDB tenfold, could it just increase salaries by ten, force companies to pay ten times more and spend 10 times more in every field as well ? So that everything is increased proportionally, thus making the GDP grow.

In: 0

Answer 1

In the local currency yes, but GDP is tipically measured in USD and that would create a tenfold inflation so the local currency would devalue tenfold relative to the USD and the GDP would remain the same.