Of all the sectors we came across why should one focus on employment & GDP? Could there be other issues which should be examined?Of all the sectors we came across why should one focus on employment...
Of all the sectors we came across why should one focus on employment & GDP? Could there be other issues which should be examined?
It would be easier to answer this question if you told us something about what other "sectors" you have looked at in the course that you are taking. It would also be good to know what the purpose is -- why are you looking at these "issues?"
I wonder if you are looking at ways to measure how well an economy is doing. Employment and GDP are typically used to measure this. However, there are at least two other areas that you might want to consider:
First, price level. It is important for an economy to avoid excess inflation (and, more rarely, deflation). Excess inflation can lead to instability in the economy because no one knows how much the currency will be worth in the future.
Second, you should look at productivity. This is the amount that an economy produces per unit of input. Usually, we talk about this in terms of labor -- is your economy producing more or less per man hour than it used to? This is important because economies must become more productive in order to compete globally and in order to grow in real terms.
Agree with the post above, and would add that a couple of other indicators of a recovering or faltering economy are new housing starts/foreclosure rates, i.e. the health of the housing industry, as it is a bellwether for construction, real estate, banking, etc. It will be difficult for this economy to really recover until the foreclosure rate drops, and the excess inventory of existing homes is soaked up by demand.
I would also look at consumer confidence and consumer spending. Consumers have a great deal of influence over the direction of the economy, as it is based mostly on what they buy and consume. If consumers believe times are getting better, they are more likely to buy a new TV, take a vacation, etc. and consumer spending rises. Businesss react to that by hiring new workers and increasing inventories. Investors respond to that by shifting money back into the stock market, which compounds the improvement.