Fundamentals of Macroeconomics
Stafford M. McClendon
University of Phoenix Online
Describe the following terms in your word.
• Gross domestic product (GDP)
The Market value or measure of how strong a countries economy is. Also a measure of the dollar value or goods produced at a given time period.
• Real GDP
Real GDP represents the actual dollar value exercised for constant change. Market values change rapidly and often, the real GDP is shows the value as it changes.
• Nominal GDP
Nominal GDP is a measure of how strong the dollar value, but because inflation has not been accounted for the figures are sometimes inconsistent.
• Unemployment rate
Rate at which people are either looking for a job or just simply does not have a job. It is measured by the number of people reportedly in the country at one time adjusted by those who are eligible to work and are not.
• Inflation rate
Rate at which the economies prices are adjusting upward or downward. Prices increase and decrease and the measure show the strength or power.
• Interest rate
Rate of interest for the use of money that has been borrowed. The interest is like the tax added to the pay back.
Consider the following examples of economic activities:
• Purchasing of groceries
• Massive layoff of employees
• Decrease in taxes
Describe how each of these activities affects government, households, and businesses. Describe the flow of resources from one entity to another for each activity.
Governmental policies affect the purchasing of groceries by penalties be placed and enforced upon the farming industry which affects how we shop because farmers cannot practice certain methods that do producing faster and larger products. When people go grocery shopping sometimes they have to make rash decisions because they have to decide what is necessary...