GDP measures the total market value of all final goods and services produced within a country in a specific time period. Used goods, intermediate goods, and financial transactions are excluded to avoid double-counting or because they do not reflect current production.
When the unemployment rate exceeds the natural rate, it often reflects cyclical unemployment caused by a downturn in the economy, where demand for goods and services decreases, leading to job losses.
The CPI tracks changes in the cost of a fixed basket of goods and services purchased by households, serving as a key indicator of inflation.
Nominal GDP is calculated using current prices, so it increases with inflation. Real GDP, adjusted for inflation, reflects actual production and is unaffected by price changes alone.
Structural unemployment occurs when workers' skills do not align with the needs of employers, often due to technological advances or changes in industries.
