The principles of economics arise from the relationship between an individual's needs and desires and available resources. Due to the consumption-based society, individuals are designed to spend money on the best goods and services to provide a comfortable standard of living. However, these goods and services cannot be produced unless there is an ample supply of resources, such as land, raw materials, innovation, and labor. The correct use of these resources allows the production of goods and services that satisfy the desires of individuals. Economics is defined as a social science concerned with making optimal choices under conditions of scarcity. As a subunit of economics, macroeconomics deals with the economy as a whole. It tries to find a pattern for the economy, measuring total output, total employment, total income, and other various economic issues. Aggregate output is used as the primary measure of the economy's performance. Gross domestic product defines aggregate output as the value of goods and services produced each year. GDP can be determined through two approaches: the expenditure approach and the income approach. The expenditure approach is the sum of all expenditure on final goods and services in a year. Through the expenditure approach, GDP can be calculated by summing household consumption (C), business investment 〖(I〗_g), government purchases (G) and net exports (X_n). On the other hand, the income approach focuses on the sum of all income generated from the production of final goods and services. To calculate GDP with the income approach, add wages, rent, interest, profits, and statistical adjustments. The preferable outcome would be for GDP to increase at a healthy rate but not… middle of paper… because discouraged workers are not counted in the labor force, they are not considered in the unemployment calculation. The effect on GDP from discouraged workers is similar to that of unemployment. Since people don't work, they don't produce the maximum amount of goods, creating the (discouraged) GDP gap. All countries in the world seek economic growth and prosperity. Economic growth can be measured as an increase in real GDP or an increase in real GDP per capita over a period of time. An increase in production relative to population size generates higher income, which promotes a higher standard of living. Ultimately, increasing GDP improves the products and services consumers demand. When economic growth is suspended, GDP will always decline due to the increased inability to hire individuals (McConnell, Brue and Flynn 486-539).