Which economic indicator reflects the overall health of the economy?

Gross Domestic Product (GDP) is widely regarded as a comprehensive indicator of the overall health of an economy. It measures the total monetary value of all final goods and services produced within a country's borders over a specific time period, usually quarterly or annually. A rising GDP indicates economic growth and suggests that consumers and businesses are spending money, investment is occurring, and the economy is functioning well. Conversely, a falling GDP can signal an economic recession, contraction, or downturn.

While the other options do provide valuable insights into specific aspects of economic health, they do not offer the same broad measure of overall economic performance. For instance, the Consumer Confidence Index gauges consumer sentiment and willingness to spend, but it does not account for actual economic output. The unemployment rate reflects labor market conditions but does not capture the complete economic picture. Similarly, the global trade balance indicates the difference between a country’s exports and imports, which is important for understanding international economics, yet does not directly measure domestic economic activity.

Overall, GDP serves as a fundamental indicator that encapsulates various facets of economic performance, making it the most reliable measure to assess the health of an economy.