What are different methods of financial growth measurement?
Financial growth is measured according to changes in the value of produced products and services of the economy, inflation rate, changes in the amount of circulating money and interest rates. The gross domestic product (GDP), which includes several macroeconomic components and financial markets, is measured in terms of nominal and real GDP. The percentage change in the amount of products and services from one year to another is a real GDP that is synonymous with macroeconomic growth.
The gross domestic product is the primary method of measuring the growth of the nation. It takes into account consumer expenditure, corporation investment and government expenditure. GDP also includes pure country exports that are calculated by deducting total imports of total exports. The final result is the cash market value of the whole economy of the country. In the amount of products and services from the benchmark year to the current year. For example, if the government of the nation wants to determine the amount of finance growth that occurred in ten years, it would first deduct the amount of the lastThe year since the amount that was reported ten years ago. This number would then be divided according to the total amount of the last year in order to determine the percentage or speed of growth. The measurement reflects whether the value of the country's economy is experiencing growth and for which the level is, provided that the average prices remain the same.
The Earth's inflation rate is directly associated with changes in the economic offer. It is equivalent to the amount of money growth added to change the amount deducted from the output. The low inflation rate may indicate that the market value of the produced products and services of the economy is essentially a polluting. High inflation suggests that the economy's money supply is significantly increased due to the higher market value of the goods and services of the produced nation.
Interest rates are used to measure and control financing. In economic recessions, the government's central reserve bank has the ability to reduce interest rates to support BConsumer expenditure and economic money supply. Lower interest rates tend to stimulate financial growth, but result in lower short -term income from investment for stocks, bonds and savings accounts. Interest rates of national reserves are increased to reduce inflation and financial growth by promoting the average price level. Interest rates also support a reduction in the amount of circulating money and discourages consumer loans.