What causes GDP to fluctuate?
What are the Determinants of GDP Fluctuations?
Since GDP describes the total value of all goods and services in an economy, then consumer consumption is a major source of GDP fluctuations. This is because the more people buy, the more needs to be produced in order to meet demand; the less they buy, the less needs to be produced. A high GDP partly reflects citizens able to buy more than just their bare necessities and can moving on to things such as computers, high-end clothing and portable music players. The converse is also true.
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