Fundamentals of Macroeconomics
Fundamentals of Macroeconomics
Lisa Rasch
ECO/372
June 18th, 2012
Sigmund Karczewski
Fundamental of Macroeconomics
Part 1 * Gross Domestic Product (GDP)- GDP is the value of all goods and services that have been produced in a country within a period of time. * Real GDP- Real GDP refers to the value of all goods and services that has been adjusted for inflation or deflation. * Nominal GDP- Nominal GDP refers to the value of all goods and services that has not been adjusted for inflation or deflation. * Unemployment Rate- Unemployment rate refers to the percentage of people in a country who want to work and are able to work but cannot find jobs. * Inflation Rate- Inflation rate is the rate of price increases within a period of time. * Interest Rate- An interest rate is the amount of money a person pays in order to borrow money.
Part 2
Purchasing Groceries
The purchasing of groceries has an effect on the United States’ economy and its three sectors; businesses, households, and government. Purchasing groceries effects households and businesses the most however government is also effected. Government is responsible for creating the rules and regulations surrounding the production of the groceries (food safety laws, etc.). Businesses then produce the groceries within the government regulations increasing value for that business. After the businesses have produced the goods, the goods are then purchased by other businesses to be sold to consumers. Generally, a grocery store (a business) will purchase the groceries from vendors (other businesses), increasing the value of their business; that inventory is then sold to households (consumers). Once the goods are sold to consumers, the value of the goods is then transferred to the consumers.
Massive Layoffs of Employees A massive layoff of employees also has an effect on the three sectors of the U.S. economy. A massive layoff affects households the most although the other two
Lisa Rasch
ECO/372
June 18th, 2012
Sigmund Karczewski
Fundamental of Macroeconomics
Part 1 * Gross Domestic Product (GDP)- GDP is the value of all goods and services that have been produced in a country within a period of time. * Real GDP- Real GDP refers to the value of all goods and services that has been adjusted for inflation or deflation. * Nominal GDP- Nominal GDP refers to the value of all goods and services that has not been adjusted for inflation or deflation. * Unemployment Rate- Unemployment rate refers to the percentage of people in a country who want to work and are able to work but cannot find jobs. * Inflation Rate- Inflation rate is the rate of price increases within a period of time. * Interest Rate- An interest rate is the amount of money a person pays in order to borrow money.
Part 2
Purchasing Groceries
The purchasing of groceries has an effect on the United States’ economy and its three sectors; businesses, households, and government. Purchasing groceries effects households and businesses the most however government is also effected. Government is responsible for creating the rules and regulations surrounding the production of the groceries (food safety laws, etc.). Businesses then produce the groceries within the government regulations increasing value for that business. After the businesses have produced the goods, the goods are then purchased by other businesses to be sold to consumers. Generally, a grocery store (a business) will purchase the groceries from vendors (other businesses), increasing the value of their business; that inventory is then sold to households (consumers). Once the goods are sold to consumers, the value of the goods is then transferred to the consumers.
Massive Layoffs of Employees A massive layoff of employees also has an effect on the three sectors of the U.S. economy. A massive layoff affects households the most although the other two