Question

economists do not use actual values of real GDP to measure economic growth because

Answer 1

GDP is used to measure a country's economic activity. A country's GDP says whether it's economy is growing or not. If GDP increases, the economy is healthy and growing. If GDP falls, the economy is contracting. GDP is often measured quarterly, but when expressed it is shown as annual figure. For example, if the first quarter GDP is increased by 3%, this implies that economy has grown by 3% over the last year first quarter. So economists do not use actual values of real GDP to measure economic growth, they just take an average to check whether the economy is growing or contracting. As we know there is fluctuations in economic activities; production may be high or low depending on demand or supply, there may be fluctuations in peoples' income and expenditure, this could bring changes in real GDP.