ABSTRACT
A serious problem in the measurement in money terms of production, consumption, transactions and other aspects of the economy of countries or regions is the propensity of exchange rates between different currencies to alter frequently and sometimes drastically. This question is illustrated in Table 1.8 by GDP, the total value of goods and services produced in an economy during a given period, usually a year. Each year during the period 1982-90 the GDP of the UK in billions of pounds was as indicated in column (2) of Table 1.8. Fluctuations about the average were even greater over shorter periods within each year than from year to year. Thus, because the pound weakened against the dollar between 1982 and 1984, it appeared that the GDP of the UK actually fell, if measured in dollars. Later, from 1988 to 1990, it appeared to grow very fast. International comparisons of production, consumption, trade and other economic indicators are for convenience often made in US dollars, but in the European Union, the ECU (European Currency Unit) is now used for some purposes in place of the national currencies of the Member States, yet another source of confusion.
