Fundamentals of Macroeconomics
Terms and definitions
Gross domestic product (GDP) - GDP is the market value of all recognized final goods and services produced with in a country for a given time period.
Real GDP – the real GDP adjusts for inflation, real GDP is based on the prices of a good or service in a year with accounting for inflation or deflation.
Nominal GDP – on the other hand does not adjust for inflation, nominal GDP is based on the prices of goods or services in a year with out accounting for inflation and deflation.
Unemployment rate – is the percentage of the total workforce that is unemployed but that are willing to work and that actively looking to seek employment.
Inflation rate – is the increase in the levels of price for goods and services. Inflation is measured by annual percentage increase and as inflation raises the dollars that you own but a smaller percentage of a good or service.
Interest rates – interest rates is the amount charged that expressed in a percentage by a lender to borrower for the use of an asset such as a house or a car for example.
Purchasing of groceries an example of economic activities
The purchasing of groceries effect the economy more so than most people think. During or nations recession the vast majority of household cut back of there grocery purchasing some families even started growing a garden and canning there own vegetables either because of the reduction of family income or for fear of what may happen with our economy. Not only did families cut back of there groceries purchases but families also cut back on eating out at restaurants. This in turn played a part in effecting our countries GDP. The gross domestic product (GDP) is a way to gauge the market value of all recognized final goods and services produced with in a country for a given time period. The ripple effect of this was unemployment rates.
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