1.Since Country A has a higher GDP than Country B then this must mean Essay - 2

1.Since Country A has a higher GDP than Country B then this must mean the residents of Country A are better off in terms of economic welfare. Discuss - Essay Example GDP also shows the productivity of a nation. Countries like China and India have better GDP rate compared to U.S. as per the latest studies. The recent television reports has shown that the American secret agency has submitted a report to the Bush government that India and China will become super powers within 20 years. â€Å"The monetary value of all the finished goods and services produced within a countrys borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public  consumption, government outlays, investments and exports less imports that occur within a defined territory. From the above definition it is clear that if a country produces maximum finished goods within a time span (normally 1 year) the GDP will increases. From the above equation it is clear that GDP will increase when the consumer spending, government spending and sum of country’s business spending increases. The GDP will also increase when exports exceeds the imports (NX value). Now we can try to analyze GDP a little more deeply by studying the GDP rate of two countries; one with higher GDP rate and another with lower GDP rate. GDP incorporates many of the economic indicators of a country such as retail sales, personal consumption and wholesale inventories etc. â€Å"The general consensus is that 2.5-3.5% per year growth in real GDP is the range of best overall benefit; enough to provide for corporate profit and jobs growth yet moderate enough to not incite undue inflationary concerns. If the economy is just coming out of recession, it is  OK for the GDP figure to jump into th e 6-8% range briefly, but investors will look for the long-term rate to stay near the 3% level. The general definition of an economic recession is two consecutive quarters of negative GDP growth, which last occurred in the United States in 2001.  (Ryan Barnes). GDP is concerned with the region in which income is generated. It is the market value of