There are many factors in our economy that have an impact on the U. GDP stands for Gross Domestic Product and it measures the value of the amount of goods and services produced in a country annually. Aspects in our economy have the potential to impact our GDP dramatically. They control prices and values of each good and each service, therefore the GDP can rise or fall very easily according to these aspects. Such aspects of our economy that control our GDP are the law of demand, stock exchange activity, and the Federal Reserve System. .
The law of demand determines how much the people want and are willing to pay for a good or service. The law of demand says that the lower prices go, the more people will want. Since the GDP measures how much value there is in goods and services, the law of demand affects it greatly because it controls the value. Producers look at the law of demand and try to find a point where they can make the most profit. By selling their goods and services at a higher price, they are inflating the GDP.
Another aspect that has the potential to inflate our GDP is the stock exchange and the activity that comes with it. By looking at the stock exchange, we can see which companies are the most valuable. If these countries find the perfect point on the law of demand, they can make more profit and raise the GDP. The stock exchange determines how much something is worth at a given time, so it greatly affects the value of all goods and services. If the stock market is high or rising, as in a bull market, the GDP will increase. If the stock market is low or dropping, the GDP will decline. Traders need to be able to buy and sell stocks when they are worth a good amount in order to make a profit. .
This is where the Federal Reserve System comes in. The Federal Reserve is a national banking network They do a number of things in order to try and control the money supply.