Question

Gross domestic product requires a. borrowing, which requires sufficiently high interest rates to prevent free riders. b. investment, which requires borrowing, which requires sufficiently low interest rates to prevent free riders. c. investment, which requires borrowing, which requires a functioning loanable funds market. d. inflation equal to the nominal rate of interest, which means lending equals borrowing. e. borrowing, which requires the real rate of interest to be equal to inflation, which requires a functioning loanable funds market.

Answer 1

Answer: C. investment, which requires borrowing, which requires a functioning loanable funds market.

Explanation:

GDP is primarily used to gauge the health of a country's economy. It is the monetary value of all the finished goods and services produced within a country's borders in a specific time period and includes anything produced by the country's citizens and foreigners within its borders.

The Gross Domestic Product measures the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time. ... GDP is a number that expresses the worth of the output of a country in local currency.