The Importance of GDP

The concept of Gross Domestic Product or GDP has always been a significant term in the field of economics but with today's struggling and lackluster economy, the term has become more prevalent to all on a global scale. The term GDP is a measure of the overall size and well being of an economy. Although GDP hardly has an effect on our daily lives, the behavior of GDP helps us to understand the behavior of other important economic concepts such as the unemployment rate and inflation rate. Not only has this figure become relevant to many citizens of the United States as shown by a speech by President Obama shown below, but this term has become noteworthy on an international level as well. Other countries too are amidst trying to pick up the pieces left behind by the collapse of the sub-prime mortgage industry in the U.S. in 2007 that had a domino effect on their markets as well. Thus, signifying just how globally interconnected the world is becoming.

The Video clip below is from the United states President Barrack Obama, on august 1, 2009. In this clip the president explains to the public what the term GDP is and why it is a significant indicator of the overall health and stability of the United States economy. The president then goes on to let the citizens of the United States of America know that the economy is experiencing progress and signs of recovery, on the basis that the U.S. GDP has been experiencing recent gains. And that he believes that this overall economic progress is due to his recent recovery act.