Answer to Question #218297 in Macroeconomics for Khwisti

Question

How does fluctuations of GDP may affect the business. Discuss the effect of both increasing and decreasing trends on the business.

Answer 1

Increasing GDP leads to the economy's growth because more jobs are created, thus increasing labor supply for production. Decreasing GDP shrinks the economy because there will be high unemployment. Increasing trends in business show that GDP is rising, leading to economic growth, while decreasing GDP shows less economic growth.