What makes an economy objectively “good”? People seem to complain about the economy being “bad” all the time but who/what determines if it’s truly “good” or “bad”?
In: Economics
An economy is so complex, it’s hard to say… and in almost any case, there will be those people/jobs/regions doing well and others not doing well. But in general, there are some key economic stats that are looked at:
– GDP (gross domestic product) is the combined value of everything produced. We want to see year-over-year growth in this. Two quarters of negative GDP growth means a recession.
– Unemployment rate is percentage of people working or looking for work who are employed. 5% unemployment is considered “full employment” as there are always people entering workforce, quitting jobs, etc. Currently, unemployment is around 4% meaning it’s hard for employers to find and hire enough workers.
– Stock market indexes like Dow Jones Industrial Average, NASDAQ, S&P500.
– Inflation rate. We want to see a little inflation, around 2%. Much higher and that can be bad.
Latest Answers