Fundamentals Of Macroeconomics
The Fundamentals of Macroeconomics Before being able to grasp what economics has to offer it is important to understand the terms and concepts that are frequently used in economic. This paper will consist of two parts, part one will explain six terms; gross domestic product (GDP), real GDP, nominal GDP, unemployment rate, inflation rate, and finally interest rate. Part two will consist of describing how three economic activities, such as purchasing of groceries, massive layoff of employees, and decrease in taxes. There will also be a few different examples that affect government, households, and businesses.
(Part one)
Start by describing the six economic terms. Gross …show more content…
This type of GDP adjusts with the price levels in order to produce a more accurate number.
Nominal gross domestic product (NDP) is the gross domestic product without taking into account inflation and can be misleading because appear to be higher than it really is because it has not been adjusted for inflation.
Unemployment rate is the amount of people that are not employed and are looking for work. This reflects only the people who are ability to work, willing to work, and are looking for …show more content…
The purchasing of groceries by customers controls supply and demand. When the economy is good customers buy more there is greater chances of businesses making a profit, and when the economy is in a recession customer buying power is low. The recession and customers not buying groceries businesses will have to lay people off. The purchasing of groceries also affects the government because the government receives sales tax on the purchase of these items.
A massive layoff of employees will cause the unemployment rate to go up, and when people have been layoff they purchase less and collect unemployment. This affects businesses because demand of products and services are down, and they are not making as mush product as they once did. The household is effect with no money coming in they cannot pay their bills, or supply what the family needs to live. The government is affected because the people that were laid off are collecting unemployment from the
(Part one)
Start by describing the six economic terms. Gross …show more content…
This type of GDP adjusts with the price levels in order to produce a more accurate number.
Nominal gross domestic product (NDP) is the gross domestic product without taking into account inflation and can be misleading because appear to be higher than it really is because it has not been adjusted for inflation.
Unemployment rate is the amount of people that are not employed and are looking for work. This reflects only the people who are ability to work, willing to work, and are looking for …show more content…
The purchasing of groceries by customers controls supply and demand. When the economy is good customers buy more there is greater chances of businesses making a profit, and when the economy is in a recession customer buying power is low. The recession and customers not buying groceries businesses will have to lay people off. The purchasing of groceries also affects the government because the government receives sales tax on the purchase of these items.
A massive layoff of employees will cause the unemployment rate to go up, and when people have been layoff they purchase less and collect unemployment. This affects businesses because demand of products and services are down, and they are not making as mush product as they once did. The household is effect with no money coming in they cannot pay their bills, or supply what the family needs to live. The government is affected because the people that were laid off are collecting unemployment from the