What indicators are commonly used to gauge economic performance?

The correct answer includes GDP, the unemployment rate, the inflation rate, and the balance of trade as key indicators used to gauge economic performance.

Gross Domestic Product (GDP) measures the total value of all goods and services produced in an economy over a specific period, making it a fundamental indicator of economic health. It reflects the overall economic activity and growth trends.

The unemployment rate indicates the percentage of the labor force that is unemployed and actively seeking work. A high unemployment rate typically signifies economic distress, while low unemployment often corresponds with a thriving economy.

The inflation rate measures the rate at which the general price level of goods and services is rising, indicating the purchasing power of currency. Moderate inflation is normal in a growing economy, but high inflation can erode purchasing power and destabilize economic conditions.

The balance of trade reflects the difference between a country's exports and imports. A positive balance (trade surplus) indicates that a country exports more than it imports, contributing positively to GDP, while a negative balance (trade deficit) can signal economic issues.

Together, these indicators offer a comprehensive view of economic performance, helping analysts, economists, and policymakers understand the current state of the economy and make informed decisions.