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The two terms GDP and GNP are almost identical. If consumer spending grows?if people buy more clothing and cars and homes?then the economy grows. If business investment grows?if companies invest in new buildings and equipment and buy more raw materials?then the economy grows. If government spending grows?if money is poured into the space program, defense, roads, and police forces?then the economy grows.
* Difficulties in measuring Gross Domestic Product
GDP is widely used by economists to follow how the economy is moving, as its variations are relative quickly identified. However, its very difficult to measure GDP...
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