What economic indicator is used to determine the health of a country's economy?

Gross Domestic Product (GDP) is a key economic indicator used to assess the health of a country's economy. It measures the total monetary value of all goods and services produced within a country's borders over a specified period, typically annually or quarterly. A growing GDP indicates a thriving economy with increasing production and consumption, while a declining GDP may signal economic trouble, such as recession or stagnation.

GDP encompasses various aspects of economic activity, making it a comprehensive indicator for evaluating overall economic performance. It reflects the strength of consumer spending, business investment, government expenditures, and net exports. Policymakers, investors, and businesses often rely on GDP figures to inform their decisions, making it a critical tool in economic analysis.

While other indicators, like the Consumer Price Index, Interest Rate, and Unemployment Rate, provide important insights into specific areas of the economy, none offers the broad overview of economic health that GDP does. For instance, the Consumer Price Index measures inflation and price changes, while the Unemployment Rate indicates labor market conditions. Interest Rates influence borrowing and investing but do not directly reflect the total economic output. Therefore, GDP serves as the primary benchmark for gauging a country's economic well-being.