What causes gdp to rise and fall?

Question

What causes gdp to rise and fall?

Answer 1

let me guess.. this is for your economics  final which is due tonite?  

Answer 2

A simple answer would be the business cycle. This is when the economy fluctuates from boom, to downturn, to recession, then upturn and back to boom.

The definition of GDP is the total value of all goods and services produced within an economy. So when the value of goods and services in the economy increases, so does GDP and vice versa. The level of real GDP in an economy depends on Aggregate Demand and Aggregate Supply and where these curves cross (Macroeconomic equilibrium). If you research and understand what causes Aggregate Demand and Aggregate Supply to change, you'll understand why real GDP changes. Unfortunately I'm unable and unwilling to write a macroeconomics textbook right here right now. If you want one to buy one I used Economics 7th Edition by Parkin et al for my macroeconomic course in the the first year of my economics degree and would recommend it.

Hope that helps.

Answer 3

It cannot be interpreted in just a few words so here is a link for u to understand about GDP.

http://64.233.169.104/search?q=cache:GlY...