Which economic indicator measures the overall health of an economy?

Gross Domestic Product (GDP) is the most comprehensive economic indicator that measures the overall health of an economy. It represents the total monetary value of all goods and services produced within a country's borders over a specific time period, typically annually or quarterly. By calculating GDP, economists can gauge the economic activity and productivity of a nation.

A rising GDP generally indicates a growing economy, suggesting that businesses are producing more goods and services, and consumer spending is increasing. Conversely, a declining GDP may point to an economic contraction, higher unemployment, and reduced consumer spending. Therefore, GDP serves as a crucial tool for assessing economic performance and guiding policy decisions.

While other indicators like the Consumer Price Index, Unemployment Rate, and Stock Market Performance provide valuable insights into specific aspects of the economy, they do not encapsulate the entire economic picture like GDP does. The Consumer Price Index focuses on inflation and the cost of living, the Unemployment Rate highlights employment trends, and Stock Market Performance reflects investor sentiment and financial markets, but none of these measure total economic output directly. Thus, GDP stands out as the best indicator of overall economic health.