Fundamentals of Macroeconomics Essay

Submitted By Sabina-Koso
Words: 782
Pages: 4
Open Document
Fundamentals of Macroeconomics
Part I
Gross domestic product (GDP) In 1991 GDP became official measure of the economic health of US. Prior to this US used the gross national product (GNP), which did not provide accurate measure of economy of the US because they counted the people who worked for US abroad. With GDP it became focused on analyzing the production, investments, imports, and exports of US economy and it also includes the measure of employment rate. GDP could either be positive or negative. Positive means profit and negative the loss. Both, private and public segments are reporting their GDP either quarterly or annually.
Real GDP Real GDP measures the inflation which means that it can record changes in the prices and provide more accurate reports. When real GDP shows changes in prices in one year it means that it would also affect the regular GDP in recording accurate amounts. Real GDP is used by economists and the government to compare the GDP from one year to other years in order to analyze the economic growth.
Nominal GDP Nominal GDP is calculated as subtracting the inflation factor from the GDP. Using current market prices nominal GDP measures the total value of products and services that were produced. Unlike Real GDP nominal GDP does not include inflation in the calculations resulting in higher estimates.
Unemployment Rate Unemployment rate measures people who are currently unemployed as well as the people who are capable of working and actively seeking work. Senior citizens, people with disabilities, and people under 16 years of age are not included when measuring unemployment rate. However, unemployment rate does not include underemployed people or the people who are discouraged and have stopped searching for work. For this reason, unemployment rate does not provide the accurate information of unemployed population. Unemployment rate plays major factor on supply and demand because if people do not work and they do not earn income they are unable to spend which affects the economic growth.
Inflation Rate Meaning of inflation rate is when the goods or service prices are increasing but the buying of foresaid is decreasing. Inflation is considered to have occurred when the prices continuously rise. If this occurs government and the economists become concerned because the distribution of income becomes unjust and unfair.
Interest Rate Interest rate is usually imposed by lenders on the monetary loans or purchase of equipment or property. However, interest rate is also imposed on public in many states across the US when purchasing goods from stores. When banks start increasing and charging higher interest rates it affects the country’s economy because fewer people are borrowing or purchasing and more people are prone to save instead of spend. When the interest rate is on a rise it also impacts businesses. When business is discouraged from expansion due to the high interest rates it slows economy. However, lower interest rates have the opposite effect on the economy and the way people and businesses think and behave. Lower interest rates help the economic growth.
Part II
Purchasing of Groceries
Show More

Related Documents: Fundamentals of Macroeconomics Essay

Fundamentals Of Macroeconomics

Fundamentals of Macroeconomics ECO 372 August 7, 2014 Fundamentals of Macroeconomics Macroeconomics is the study of the economy as a whole. What happens in the economy as a whole is based on individual decisions that are made during economic activities (Colander, 2010). Economic activities can be defined as actions that involve the production, distribution and consumption of goods and services at all levels within a society ("Business Dictionary", 2014). Purchasing of groceries, a massive…

Words 1043 - Pages 5

Fundamentals Of Macroeconomics

Fundamentals of Macroeconomics Cassandra Burns ECO/372 January 12, 2014 Godwin Quashigah Part 1 Gross Domestic Product (GDP) - is defined as the market worth of every merchandise and assistance inside a nation in a stage of measure. Real GDP- report for alteration in the value stage, a modified amount assessed to Nominal GDP. Nominal GDP- When a GDP number that has not been modified for price increase. Unemployment Rate- The ratio is an amount of…

Words 329 - Pages 2

Fundamental Macroeconomics Essay

Fundamentals of Macroeconomics Fundamentals of Macroeconomics Principles of Macroeconomics ECO372 July 22, 2013 University of Phoenix The assignment this week consists of two parts. Part one requests terms described by using our own interpretations, while the second part is a discussion summarizing the affects of some economic activities on the government, households, and businesses. Gross Domestic Product (GDP) is the single most used instrument in measuring economic activity. The GDP…

Words 854 - Pages 4

Fundamentals Of Macroeconomics Paper

Fundamentals of Macroeconomics Paper Kate Eriksen ECO372 June 2, 2014 David Euler Fundamentals of Macroeconomics Paper “Macroeconomics is the study of the economy as a whole” (Colander, 2013, p. 6). Colander explains farther that macroeconomics looks into inflation, unemployment, business cycle, and growth (2013, p. 6). For the purpose of this paper, I will be explaining how certain economical activities affect four principle components of any economy, households, firms (also known as businesses…

Words 531 - Pages 3

Essay on Fundamentals of Macroeconomics

Fundamentals of Macroeconomics Michael Medley Eco/372 June 11, 2012 David Euler In order for people to understand macroeconomics they have to distinguish between individual effects on the economy and the whole economy. Macroeconomist concentrate on the economy as a whole. Fluctuations in activities associated with the market can have drastic ramifications on the economy because the changes affect how governments, households, and businesses deal with the fluctuations within the economy. The…

Words 1018 - Pages 5

Fundamentals Of Macroeconomics Paper

Fundamentals of Macroeconomics Zachary Madrid ECO/372 July 20, 2015 Joseph Krupk Fundamentals of Macroeconomics Through our online textbook, I come to understand that macroeconomics is the study of the overall economy that provides an analysis of problems with bussiness cycles, inflation, unemployment, and growth. Macroeconomics targets the accumalated links between everyday household consumption ties in with income and how our government policies affect growth of society. Through this…

Words 374 - Pages 2

Fundamentals Of Macroeconomics Paper

Fundamentals of Macroeconomics Paper Principles of Macroeconomics/ ECO/372 Fundamentals of Macroeconomics “Macroeconomics is the study of the economy as a whole. It considers the problems of inflation, unemployment, business cycles, and growth” (Colander, 2013, p.5). Economic Activities Economic activities go on day in and day out. Throughout the United States, we have consumers buy, sell and trade. We have many economic activities from an employee requesting a loan on their profit sharing plan…

Words 778 - Pages 4

What Are The Fundamental Of Macroeconomics

Fundamentals of Macroeconomics • Gross domestic product (GDP)- Gross domestic product is a country’s economic indicator. GDP measures the total output of services and products from boarder to boarder of the country. GDP is a measuring of the economy within a time period of the country. • Real gross domestic product (RGDP)- This adjusts inflation measures of the real value of products, services, and goods produced in a year. Real gross domestic product accounts for changes in price levels to…

Words 890 - Pages 4

Essay on Fundamentals of Macroeconomics

Fundamentals of Macroeconomics ECO/372 01/02/2012 Introduction The fundamentals of macroeconomics have many key terms that will help you gain a better understanding of the activities involved in economics. These activities affect government, households, and business that impact our economy and shape our society. The first term is gross domestic product (GDP), which is an indicator of a country’s standard of living. GDP is the…

Words 808 - Pages 4

Notes On Fundamentals Of Macroeconomics

Fundamentals of Macroeconomics Rudy Burns ECO/372 February 25, 2013 Laurence Hagan Fundamentals of Macroeconomics Part I * GROSS DOMESTIC PRODUCT (GDP) - The total value of the goods and services produced by the people of a nation during a year, excluding the value of income earned in foreign countries ("Gross Domestic Product," 2013). * The GDP is the total cost of finished goods and services produced. That means products that are manufactured as components to a finished are not…

Words 747 - Pages 3