Economics
4th Edition
ISBN: 9781464143847
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
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Question
Chapter 22, Problem 1BCQ
To determine
Why businesses care about GDP to such an extent that they want early estimates.
Concept Introduction:
Expert Solution & Answer
Explanation of Solution
- GDP is greatly significant in a business as it tends to reflect the measure of the size of any economy and also the economic performance. As in the given case, many companies and other players so eagerly wait for the GDP that they consider the predicted GDP does not even wait for the official estimates.
- A business always wants to have the latest figures to conduct early estimates for analysis and comparison. This prediction helps them in predicting the demand for goods and services in the economy.
- If the business does not have early estimates, then they can lag behind because there is a cut-throat competition. To survive in the competing world, quick estimates and quick reaction are needed.
Conclusion:
Thus, the GDP matters in the business.
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