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Macroeconomic. Macroeconomic Introduction Economic is a social science that typically
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Submitted by freeagen on October 17, 2007
Category: Business
Words: 1119 | Pages: 5
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Macroeconomic
Introduction
Economic is a social science that typically studies the production, distribution and consumption of good and service. The study of economic is divided into two branches, microeconomic and macroeconomic. In this paper I like to concentrate on macroeconomic. In there, macroeconomics terminology will be defined, and the description of macroeconomic activity among the major sectors and its markets, or so called the circular flow model.
Macroeconomic
Macroeconomic is the study of the behavior of the economy as a whole. This is the very complicate field and there are many factors that influence it. Macroeconomic analysis focuses on these things: Gross Domestic product, unemployment, inflation, and interest rate.
1) Gross Domestic Product (GDP) is the total market value of all final goods and services produced in an economic in one year period. (Colander, 2004). GDP also is an economic indicator it measure the size of economic by this formula ( Wikipedia )
GDP = C + I + G + NX
Where
• C is private consumption, personal expenditure of households such as food, rent, medical expense, and new housing.
• I is defined as business investments in capital.
• G is the sum of government expenditures on final goods and services
• NX are “net export”, NX = gross exports – gross imports
2) Real GDP, is a GDP adjusted for inflation (colander, 2004), and which reflects only changes in prices.
3) Unemployment rate: Unemployment is the condition of willing workers lacking job. To measure the unemployment rate is take the number of unemployed workers divide by total civilian labor force. The unemployment rate tells an economist how many people from the available of labor are unable to find work(Wikipedia) .Unemployment is low when GDP show growth rate, or with rising of GDP levels, we know that out put is higher, and more labors are need to keep up...
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