Measuring economic worth over time

Measuring economic worth over time means figuring out how much money something is worth now versus how much it was worth in the past. Imagine you have a toy car that you got for your birthday. It was worth $10 when you got it, but now that you've played with it for a few years, it might not be worth as much. So, if you were trying to sell it now, it might only be worth $5.

Economists do similar calculations but for bigger things, like businesses, houses, and even whole countries. They use something called inflation to help them figure out how much things are worth over time. Inflation means that over time, the price of goods and services go up. So if you bought a candy bar for 50 cents 20 years ago, today it might cost $1.50.

To measure economic worth over time, economists use something called Gross Domestic Product (GDP), which is the value of all the goods and services that a country produces in a year. They can compare the GDP of a country now versus in the past to see how much it has grown or shrunk. They can also measure the worth of investments, like stocks and bonds, by looking at how much the stock or bond is worth now compared to when it was originally bought.

Overall, measuring economic worth over time helps economists understand how the economy is doing and if it is getting better or worse.